According to the newest Case-Shiller reports, home sales have increased, with the existing market values increasing more than 7% since a year ago. This bodes well if you are looking to sell your home or invest in real estate. Financial analysts, however, advise caution due to the uncertain nature of the current home market price trends.
Robert Shiller, co-author of the S&P/Case-Shiller Index, says that the ‘housing market is becoming more of a speculative asset.’ Phoenix, Las Vegas, and Los Angeles are three examples of cities which have badly performed in the housing sector. Their housing markets may have enjoyed a seemingly continuous growth spurt, but these cities have become three of the worst performing markets since the last bubble burst.
It is still risky to buy a new house or a bulk of residential properties, Shiller continues. The housing market prices are still behaving in an abnormal way, because the government accepts liability under insurance. Shiller advises investors to rent instead, and build up their portfolio with other investments instead.
Investing in today’s housing market can make you witness a turnaround when the prices decrease again. This is why it would be better if you invest your money in more stable commitments. This will help you earn more money rather than see your home’s value decline over time.