CALIFORNIA SEEN AS HOTTEST HOME MARKET IN 2010…

This was the headline in a small Orange County Register article, penned by Jonathan Lansner on July 28th. The source of the claim is FiServ, who are responsible for the Case-Shiller home price indexes. They are forecasting home prices rising 5.7% in 2010. Remember, this comes after home prices falling 48.5% from 2006. (According to OC Register and their source is Dataquick). In fact, the May index posted its first rise in home price nationally since the summer of 2006 and this index is comprised of a 20-city index. What can we get from all of this? Well, guarded optimism is a safe bet. The index measures price data in only 20 metropolitan areas, but that would seem more than enough for a thumbnail sketch of where the market is going. According to the Register News Service, these numbers matter because, “Investors closely watch the Case-Shiller to gauge the level and direction of home prices.” According to Maureen Maitland, Vice President of S&P’s index services, “We may be on the way to recovery…It will take a couple more months to see if we have turned around.” The bottom line is we appear to be on our way. Would be investors, first time buyers, and move up buyers may well be advised to start looking for that property they want. Interest rates remain very attractive, but are sure to go up in the future. Why? Remember the bailout? There is the likely possibility that as we start paying for that, inflation will rise eventually, and that means interest rates will rise. No one knows exactly when. But there is another good reason to get out there and look.