Median Home Sale Prices Rise!
For the first time in four months the median sales price for homes has risen to $156,600. This rise in home sale prices, along with a steady rise in the sales of homes is a plus-plus situation for the industry as a whole.
Sellers are finally beginning to see multiple offers on homes and seeing a definite change in pace of how quickly homes are selling in what used to be a very stagnant and long term wait for the sale of most homes in most areas.
Houses that were previously on the market for often up to a year or more are now selling at an average of 4 months or less. Some areas are seeing faster improvements than others and as always there are some areas that don’t quite fall into any one category of “normal” terms and standards of the industry as a whole; but for the most part these changes are being seen and felt throughout the housing industry. This is definitely one of the biggest signs of improvements in the U.S. Housing Industry for 2012.
- New home constructions have seen a moderate increase for the first time in years as request for permits to build have risen substantially. February of 2012 saw the most significant number of permit requests to build new homes since October of 2008. This increase in new home building and permit requests are a definite sign that the future of the housing industry is finally taking an upturn in the United States.
- Mortgage rates have been at or near record lows but are now rising slightly, giving a healthy boost to the market while not inundating the market with outrageous mortgages being handed out like candy on Halloween night as it once was and also what most believe was the beginning of the end of the housing industry’s strength. Mortgages rates are rising ever so slightly and lenders are much tighter with their standards; even making it difficult for some potential home owners to obtain mortgages with near perfect credit at times.
- The housing supply has fallen to record lows; falling in January to the lowest supply of homes on the market within the past seven years. As a typical case of supply and demand takes over, fewer houses means higher prices for the homes that are on the market and sellers are slowly seeing chances to bring in fair prices on their homes instead of watching their homes literally sink under water as their resale values fall faster than their mortgage balances. Now that there are fewer homes on the market the number of high quality homes should increase and while we are still seeing numerous foreclosures and short sales still entering the market due to the backlog of homes waiting on foreclosure we will also see more and more homes coming into the market that are not distressed homes forcing prices of quality homes to decline.
- Unemployment rates are falling and have reached their lowest point in three years. At 8.3% the job market is definitely seeing a strengthening and with that confidence in home buyers increases. This past winter, marked by the months of December 2011 through February 2012, the economy has seen an increase of approximately 245,000 jobs per month. This bright light at the end of the employment tunnel has people feeling more relaxed and at ease when making large purchases such as homes and cars.
- Foreclosures have seen a very small decrease from 35% of the sales in January to 34% in February; but experts say there is still a backlog of homes to be processed and this will slow some of the positive attributes we need to see to bring the housing industry back into a healthy state.
While all of these positives are happening there are still some concerns that have to be addressed before the market is back in good position. Some of the negative issues that need improvement include:
- First time home buyers has seen a slight decline and made up only 32% of all home purchases in February. Most economists like to see a minimum of 40% of home purchases being made by first time home buyers in order to feel that the industry is in a healthy state but 32% is definitely a closer number than what we had previously been experiencing.
- Foreclosures & Short Sales have to sell out their backlog and slow back down to “normal” numbers again.
- Lenders aren’t handing out many mortgages to buyers; even ones with near perfect credit. They’re going to have to continue to be cautious but also start allowing more mortgages go through so people with moderate to good credit can purchase homes again.
- The numbers were extremely mixed across the country; with some areas seeing decent sized increases in sales and amazing seasonal numbers while others saw unimpressive numbers or even pessimistic numbers in their area of the country. This is definitely not unusual during any market but it is also a sign that the market has a way to go before it’s considered healthy again.
- The Midwest and South both saw a seasonal rise in sales; the West and Northeast saw a substantial drop in sales of slightly more than 3%. What we want is to see an increase in sales and new construction across the line throughout the entire country before we feel “safe” and can say the industry has recovered and is once again healthy.
- In markets that were slightly more stable foreclosures were making up less than 10% of housing sales; however agents in other markets that weren’t so lucky saw anywhere from 30% to over 65% of their sales being foreclosures. Again this could be based upon the backlog of homes to be processed but in either case the distinct difference across the line throughout the country definitely needs to be more consistent before we can breathe a sigh of relief that the industry is recovered.
While each of these positive effects on the industry seems to be good news both agents and economists alike agree that we have a long road to haul before we see a full recovery from the deep wounds of the past few years. However, there is always a positive effect of seeing light at the end of a tunnel, no matter how long the tunnel may be or how dark it is until you reach the light.