Housing market gaining momentum – sales and prices up across the country
More “green shoots” sprung up for the nation’s housing market this
week. On Tuesday, the National Association of Realtors reported that
existing home sales rose in April and remain above year-ago levels, and
home prices nationwide continued to rise as well. And on Wednesday, the
Commerce Department said that sales of new homes rose 3.3 percent in
April from March to a seasonally adjusted annual pace of 343,000. That
was slightly more than what most analysts had expected.
Both reports are just the latest in a recent string of reports that
suggest a housing recovery is finally taking hold across the U.S. We’ve
certainly seen a good turnaround in many parts of the Bay Area for some
time now. But the recovery has been more tepid in some other parts of
the country, so these reports come as very encouraging news for the
housing market as a whole.
The improving existing home sales and prices were across all regions
of the U.S., NAR pointed out. Sales increased 3.4 percent to a
seasonally adjusted annual rate of 4.62 million in April from 4.47
million in March. April’s total was 10 percent higher than the 4.20
million-unit level a year ago.
“It is no longer just the investors who are taking advantage of high
affordability conditions,” said Lawrence Yun, NAR’s chief economist. “A
return of normal home buying for occupancy is helping home sales across
all price points, and now the recovery appears to be extending to home
prices.”
Yun pointed out that the decline in both listings and the so-called
shadow inventory – the anticipation of distressed homes soon to come on
the market – has shifted the housing sector in the U.S. from a buyers’
market “to one that is much more balanced, but in some areas it has
become a seller’s market.”
That’s
certainly the case for us here in the Bay Area, where a shortage of
homes on the market – as much as 50 percent below last year in some
areas – has led to many multiple offers for a single home and sale
prices above the list price, sometimes way above.
Nationwide, NAR reported listed inventory of homes for sale is 20.6
percent below a year ago. As a result, there is a 6.6-month supply of
homes on the market at the current sales pace, down from a 9.1-month
supply last year at the same time.
At the same time, the national median existing-home price for all
housing types jumped 10.1 percent in April from a year ago to $177,400.
That followed a 3.1 percent increase in March and marked the
back-to-back price increases from a year earlier since June and July of
2010, when the gains were less than one percent, Yun said.
New home sales also enjoyed strong gains in April to an annual rate
of 343,000, almost 10 percent higher than a year ago, according to the
Commerce Department. Gains were broad-based with three of the four
regions in the U.S. showing improvement (only the South saw a decline).
And the median sale price of new homes sold last month was $230,000 –up
4.9 percent from April 2011.
To be sure, the nation’s housing market still has a long ways to go
to get back to peak of the market over the past decade when as many as
two million homes sold in a single year. And economic headwinds still
face the market, everything from high unemployment nationwide to a
stubbornly slow economic recovery.
Nonetheless, we’re moving in the right direction once again heading
back to a much more normalized market. And yes, we may have a long ways
to go to get back to the top, this week’s housing reports serve to
underscore just how far we’ve come from the bottom.
Below is a market report from San Francisco offices:
San Francisco continues to be challenged with low inventory at all price
points. Multiple offers are nearly expected at price points under $1.5
million if the home has a reasonable list price and presents well. San
Francisco stats show at end of April we had a 4.1-month supply of
inventory for luxury homes over the $3 million price point – 30% less
than last April. In the $1 million to $3 million price range there’s a
three-month supply – 31% lower than last April. And under $1 million a
two-month supply – 61% less than prior April. We need more homes to
sell! That story is echoed by our Lakeside office manager. Like a broken
record – every agent’s mantra is “There are no listings. There are no
listings.” And agents representing buyers are getting writer’s cramp
from the many offers they are writing for each client. All cash no
contingency offers are winning the day when a home has been well
prepared and comes with seller inspections already done. Buyers are
even resorting to budgeting for their own pre-offer inspections in order
to improve the attractiveness of their offer. Prices have risen in
many neighborhoods but others are still weighed down by short sales and
bank owned properties, which sell for less for a variety of reasons.
Our Lombard manager says agents are seeing more offers than opens, more
buyers than sellers, more losers than winners, more over-asking than
under, and more multiples than solos. The only change this week: more
stories of buyers wanting to write, but dropping out on reports of the
number of offers. As always: Time to List. Our Sunset office reports the
multi-unit (6+) market is also on fire with very low inventory but high
demand. Multiple all cash offers are the norm, investor are definitely
out there buying these multi-unit properties. The GRM is starting to
creep up as demand is driving the price upward. Caution to all as
prices being push upward: we are seeing problems with appraisals not
coming in at sale prices.
[via Market Watch]
Janice Lee
International President’s Circle
Top Producer, Realtor
415-832-9151
JaniceFLee@Gmail.com
DRE
#01720205
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