MSR Americas Inc. Blog

“Chugging into 2013”: The 2012 U.S. Housing Market Year in Review

Posted on: February 6th, 2013

As we begin 2013, it is instructive to reflect on how significantly the U.S. housing market rebounded over the course of 2012.  MSR Americas has assembled a range of media reports and expert studies that we monitored for our clients on the U.S. and Florida markets’ recovery during 2012 to provide a clear perspective of the year in review, and to help clients understand where the market is moving for 2013.

January 2012 began with a bleak Globe and Mail article, “Looking for Hope in the U.S. Housing Market,” that reported that “prices remain at deep recession levels.”  The article provided no consensus on the market for the rest of the year, noting that there was “enough mixed data to cheer both optimists and gloomsters.”

After minor signs of recovery in late January through early February, Reuters noted in “Housing Market Recovery Hits Pothole in February” that the market had again sputtered, showing “a pause in the tentative housing market recovery in February and a weak start to the spring selling season.”

Indeed, the spring of 2012 began dismally.  A Brookings Institute study, “Addressing the Problems in the U.S. Housing Market,” pointedly declared that the U.S. market had “seen almost no recovery in housing since the severe slump.”  But by April Bloomberg had pronounced the market’s bottoming with “signs of stabilization as price declines ease[d] and home demand improve[d].”

By May, the American media had begun to echo MSR Americas’ prognosis.  TIME Magazine’s “Housing Market Recovery Has Officially Begun” article reported on a study co-prepared by the Demand Institute, a think-tank jointly operated by the Conference Board and Nielsen.  The report concluded that “the freefall is over” and that “the point has been reached where housing prices will start to climb, albeit at single-digit rates in most markets over the next five years.”

The summer of 2012 demonstrated, for some, surprising momentum to the spring’s early positive predictions as Forbes declared that the “Housing Market Turns Corner” and the World Property Channel remarked that the greater Orlando area, in particular, had shown “across-the-board price increases.”

An August Business Insider article placed six Florida communities among its list of “the 15 best housing markets for the next five years,” which firmly demonstrated Florida’s continued market upswing, and the CBC was the first major Canadian media outlet to echo the American media by reporting that “Canadian buyers face more competition as U.S. housing recovers.”

By September, Florida ranked 7th in the “10 States with the Strongest Housing Markets” report by 24/7 Wall Street, which commented that Florida demonstrated a “substantially improved longer term” forecast for investors.  The Wall Street Journal also reported a “sales surge” in September.  And by then the Globe and Mail had declared that “U.S. home prices jump[ed].”

In the later fall a Standard & Poor/Case-Shiller study, as reported by CNN’s Money section and the New York Times, confirmed that the average price for American real-estate had climbed to the “same level it was nine years ago”—four to five years before the housing meltdown.

Just recently, the World Property Channel observed that Florida placed second in the top five states for the “highest number of completed foreclosures” in 2012, second only to California, and again second with the states with the “highest foreclosure inventory,” making the state still a top buy for heavily discounted investment properties with strong capital appreciation potential.

Closing the loop on the year, the Wall Street Journal reported on January 3, 2013, in an article entitled “Home Prices Poised for Growth in 2013,” that the “housing market is chugging into 2013 with a head of steam,” while CNN reported the same day that “sales of existing homes rose 5.9 %” on a year-over-year basis.

As we look back on 2012, it is truly remarkable—even by our standards—to see how dramatic the shift in market conditions has been, making 2013, we anticipate, an extremely positive year for incremental housing market price gains in the state of Florida.

MSR Americas has long known the value of Florida rental investment properties and consequently targets established, liveable communities for our clients, who enjoy predictable net rental revenue of 8 to 10% returns on their investment and the potential for significant capital appreciation.

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