What’s the missing link we have needed to really be certain a housing recovery is here?
Home values and prices have been rising, the number of homes available on the market has been shrinking and some homes have been selling faster, so what’s been missing?
What we’ve been missing to concrete a rebound in the housing market is a real increase in the numbers of those buying a home.
The great news is that we are finally seeing home sales volume really pick up and the lag in data being published means we are now in a much healthier market than most realized. On a nationwide level a recent National Association of Realtors (NAR) report shows existing home purchases up 2.3% in July, rebounding from an eight month low. The report shows 34% were first time buyers, 27% were cash transactions, and distressed sales had fallen to just 24% of the market (12% foreclosures and 12% short sales). Based on available inventory this puts at just over a healthy 6 month supply.
Home builder confidence is also at a new high, backed up by an increase in sales. In fact Pulte Group Inc. reports a 32% jump in orders during the 2nd quarter of 2012, while AV Homes shows a 41% rise in closed sales and a doubling in new contracts in the same period.
July also saw pending home sales figures jump to the highest level in 2 years and well about what it needed to call a healthy real estate market.
Of course national statistics need to be tempered with local trends, so while cities like Boston are seeing home and condo sales shoot up 27 to 34% others are certainly still finding their footing in the recovery.
The great news is that a recovery is contagious and all areas will eventually see more positive numbers, especially as we pass the election and the peak season for the South kicks in as we turn the corner in October/ November.
