Fewer Real Estate Markets With Appreciation

Driven by anxiety from the subprime mortgage melt down growing into the conventional mortgage market, only a dozen states still have housing markets with strong enough appreciation to make the Housing Predictor appreciation list.

Housing Predictor forecasts more than 250 local housing markets in all 50 U.S. states, and provides real estate news.

Only 12 states remain on the list, the lowest number in more than a year, indicating a further weakening in the majority of real estate markets throughout the nation. Eighteen states had been on the list until nearly a month ago when weakness was determined to a high extent in four other states.

South Carolina and Louisiana markets have seen home sales slow and prices begin to fall, eliminating these two southern states from the list. In the wake of Hurricane Katrina, Louisiana produced a post natural disaster spike that sent prices upward in New Orleans and the surrounding area only to see sales slow. Louisiana perhaps more than any other state has seen its housing markets redistribute its population away from the Big Easy to other parts of the state.

After nearly five years of record appreciation in many parts of the country a majority of the nation’s markets have seen sales slow due to higher mortgage rates and fall out from the subprime loan crisis growing into the rest of the economy. However, there are 12 states, including many in the south-east and the north-west that are still appreciating with strong regional economies.

Housing Predictor has increased its forecast to 3-million homes to be foreclosed through 2009. Many mortgage borrowers are unable to make higher payments on adjustable rate mortgages on homes that have decreased in value in the last year alone. Another 2 million adjustable rate mortgages are due to be recalculated in the next two years, causing an additional onslaught of foreclosures.

A growing number of economists believe the U.S. economy will suffer a major economic blow from the foreclosure epidemic, which is growing daily.

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