Publications

- November 1, 2012: Vol. 6, Number 10

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US Housing in Recovery

by Koen Straetmans

Fundamental drivers of direct real estate markets, like rents, vacancy and prices, tend to become dominant for listed real estate pricing with a lag. Whereas real estate equities in the short term are victim to similar risk-on, risk-off themes that may drive global equity pricing, things turn out differently with an investment horizon beyond one year. Fundamentals of direct real estate become leading over a longer time horizon. Undoubtedly, housing in the United States is an important driver of both real estate pricing and economic prospects.

The latest set of data seems to confirm that US housing is coming out of a coma and is currently in recovery. US house prices recovered further in June and July 2012, with the Case-Shiller 20 major cities home price index for those months posting year-on-year rises, the first since dedicated tax credit pulses in 2010. Homebuilders’ perception of the housing market as measured by the

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