Housing market faces long, cold winter: Altos
Low interest rates and a glut of inventory failed to substantially stimulate a weak housing market this summer, according to Altos Research. Based on summer statistics and shaky economic indicators, Altos is predicting a "long, cold winter" with nothing on the horizon to suggest improved housing market activity through the fall and winter. Home prices in July rose in 14 of the 20 metro areas surveyed for the Altos Research Mid-Cities Report and inventory increased in 12 of the markets. "This is the first time we have experienced the current combination of low interest rates, high unemployment, and a glut of inventory hiding in the shadow," Altos said. "The housing market in the United States is in a constant state of flux. Volatility is the norm and the rules of yesterday's market no longer apply." The U.S. median home price rose a mere $7 in July to $256,120 from $256,113 in June, with large increases in San Antonio, Boise, Idaho, and Boulder, Colo. The biggest gain was in Boulder where home prices rose 8.23% last month, Altos said. Eight of the 20 markets saw their housing inventory levels decline, while six of 20 markets noted a drop in median prices. The Federal Reserve Bank of Dallas recently said it expects home prices to bottom out by early 2012, with market volatility somewhat limited to certain hard-hit areas, such as Arizona, California and Nevada. The Fed said markets like Texas, where jobs have been created during the recession, could see the tide shift by the early part of 2012. Write to: Kerri Panchuk.