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Latest forecast: Rising prices, rising rents

Posted by Scott Van Voorhis May 4, 2012 05:15 AM

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So says Trulia, which has jumped into the potentially risky business of predicting future price and rent trends.

While most of the major housing indexes track past sales, and as a result lag the market by months, Trulia contends that tracking asking prices and asking rents can offer a window to where the market in headed in two or three months.

The theory is what sellers and landlords are asking for now will end up being reflected in sales and leases in the next quarter. (Check out this Calculated Risk post on Trulia's approach, which does a great job laying it all out.)

If that's the case, then we could soon be moving from price deflation to price increases here in the Boston area, and possibly even double digit rent increases by year end.

Greater Boston asking prices, for example, rose 2.3 percent in the first part of the spring market through the end of March, compared to the last three months of 2011.

Asking rents, though, are rising at four times that rate, jumping 9.3 percent in the Boston area through March compared to the end of 2011. In fact, asking rents in Middlesex County, home to the western suburbs, jumped 9.7 percent during the first quarter, making it No. 8 in the country.

We are outpacing the rest of the country now in terms of price and rent increases - nationally Trulia reported a 1.9 percent first quarter increase in asking prices and a 5.6 percent jump in asking rents.

So what does this all mean?

Based on rising asking prices, the major housing market indexes, which are still in negative territory, could start turning positive this summer, Calculated Risk notes.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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