According to a Fitch US home price update, several cities are approaching “inflated bubble year peaks. With home prices up 13% Fitch sees that a unsustainable and 17% overvalued according to their sustainable home price model.
Concerns are that the rises are the product of investment sales and “flipping”. Cash sales have risen accounting for nearly 50% of sales, meaning that sales are from speculators rather than normal demand.
Fitch see mortgage rates increasing through next year and affecting affordability if prices continue to rise.
Property is always going to be one of the big investment areas and around major cities it’s always going to look like bubbles. The same is happening in London and the South of England. Anywhere in a 20-30 mile radius is going to feel the effects of rising city prices.
