Real Estate Investing

As if there wasn’t already enough temptation to move to Hawaii with all the sand and surf and pineapple, there is now yet another reason. This state is the strongest in America in terms of the real estate sales forecast for 2008, according to HousingPredictor.com. Honolulu, Maui and Kauai are expected to appreciate at 6.8, 5.6 and 4.9 percent, respectively. The cities are currently ranked second, fourth and ninth, respectively, among the top 25 appreciating U.S. markets.

Housing Predictor takes its data from independent research and analysis of individual communities across America. The site says its forecast estimates in 2007 proved to be about 86% correct — no easy feat in the tumultuous real estate year that was. Interestingly, the site’s list of the top 25 appreciating markets for this year are scattered evenly across the United States. Other than Hawaii, five other states had three cities make the list: Texas; Mississippi; Idaho; Washington and North Dakota. The even scattering from the west coast to the east coast and all points in between shows that the real estate market is indeed not as hopeless as national media would have us believe.

Of course, it was little surprise to see Austin, Texas at number 10 on the list, because this city, with its large white collar high-tech demographic, has consistently defied the trend of low Texas prices. The other Texas cities on the list, McAllen and San Antonio, probably made it on because their real estate prices have little place else to go but up. Plus, Texas is the new Florida in terms of retirees and vacationers. Hawaii has notoriously higher cost of living, so little surprise there. And Manhattan, NY, at number six on the list, may appreciate the projected 5.2%, but it will probably be primarily due to the unbelievable demand for housing there.

With towns big and small across America making the list, Housing Predictor offers hope that the housing market may just pick up sooner than we thought.

CNN Money had an interesting article speculating that the residential real estate market will finally begin correcting itself toward the end of next year. While this bit of info may seem a bit depressing, there are some bright spots around the country.

Mobile, Alabama is an unexpected leader in the up-and-comers, with a boon of new construction “mega-projects,” according to the article. Austin, Texas is another city that is thriving in the midst of the surrounding storm. Texas as a whole is faring relatively well, thanks in large part to its developing reputation as the vacation/retirement spot d’jour. But Austin is faring particularly well, with a large white-collar, high-tech, well-educated population minus the astronomical housing prices that typically go hand-in-hand with such a culture. Austin’s median single family home prices are expected to increase 4.7 percent over the next two years, however, from about $185,000 to $195,000.

And of course, Austin and Mobile were both on the list we recently featured of 10 U.S. Cities People are Watching. So if you live in one of these cities, don’t hang your head, but jump for joy. Or consider investing in real estate in some up and coming areas of town now and capitalize in a few years. You can also invest farther away from the city with the expectation that commuters and commerce will migrate outward.

Negative appreciation is a bummer and can make it seem like you will never sell your home. However, homeowners in 10 cities fortunate enough to make it on a recent list will see a brighter day if they can only hold on a little longer. These are the cities that, in terms of median single-family home prices, have “just about hit rock bottom and are on the way up,” according to The Creative Investor blog. In two years or less, it should be easy to sell your home in these markets and realize a profit. The list also might act as a cue to investors.

Not surprisingly, Texas is mentioned three times on the list - Austin, Houston and Dallas-Fort Worth. Texas real estate has been extremely affordable, though the market has been relatively liquid - particularly in Austin. There, tremendous population growth has kept home prices slightly above that of other Texas towns. At any rate, it is small wonder that home prices are expected to rise in Texas. You can hardly sell your home for less than current market conditions dictate. Prices have to go up in Texas!

The following list of projected median prices for single-family homes in 10 markets was compiled by Business 2.0 and Moody’s Economy.com:

Dallas-Fort Worth

Q1 2008: $151,930

Q4 2009: $161,690

Growth rate: 6.4 percent

Indianapolis

Projected median price of single-family homes:

Q1 2008: $122,940

Q4 2009: $130,630

Growth rate: 6.3 percent

New Orleans

Projected median price of single-family homes:

Q1 2008: $153,850

Q4 2009: $162,600

Growth rate: 5.7 percent

Atlanta

Projected median price of single-family homes:

Q1 2008: $177,750

Q4 2009: $187,640

Growth: 5.6 percent

Montgomery

Q1 2008: $140,020

Q4 2009: $147,690

Growth rate: 5.5 percent

Memphis

Projected median price of single-family homes:

Q1 2008: $143,550

Q4 2009: $150,730

Growth rate: 5.0 percent

Mobile

Q1 2008: $134,580

Q4 2009: $140,920

Growth rate: 4.7 percent

Austin

Q1 2008: $186,350

Q4 2009: $195,060

Growth rate: 4.7 percent

Houston

Q1 2008: $154,850

Q4 2009: $161,910

Growth rate: 4.6 percent

St. Louis

Q1 2008: $143,920

Q4 2009: $149,710

Growth rate: 4.0 percent