Housing prices may have reached a major positive turning point, according to a new report from Oxford, Miss.-based FNC.
And that’s good news for anyone working in commercial real estate. If the housing market gains strength, so will the commercial real estate market. Homeowners, after all, are more likely to hit their local malls or dine out at neighborhood restaurants if they feel that their homes are actually increasing in value.
According to FNC’s latest Residential Price Index, U.S. residential property values are continuing what has been a steady climb. In fact, housing prices throughout the country have risen for five straight months, according to FNC.
The index also shows that for the first time since the housing market imploded in 2007, home prices are beginning to recover on a year-over-year basis. That is key, and represents what might be the beginning of a major turnaround for U.S. housing prices.
Across the nation, July housing prices in the larest 100 metropolitan areas rose 0.7 percent from the same month one year earlier. That doesn’t sound like a lot, but any increase today is important.
How are housing prices doing in the Midwest? That depends on which markets you study. In St. Louis, for instance, housing values were up a solid 3.8 percent in July when compared to the same month one year earlier. In Detroit, the number was even better: Housing prices were up 7.2 percent when compared to July of 2011.
In Cincinnati, housing prices were up 0.7 percent, matching the national average.
Other Midwest cities were not as fortunate. Chicago, for instance, saw that housing prices were 4.4 percent lower in July of this year as they were during the same month in 2011. And in Minneapolis, housing prices were 4.3 percent lower.
Still, the FNC report is largely a positive one. And it’s one that commercial developers and brokers should be happy to see.
— Dan Rafter