Real Estate Outlook: Sales Rising in Some Areas
When consumer confidence about the economy hits its highest level of the year, mortgage rates hit the lowest in decades, and home sales jump by amazing percentages in key markets, all in one week, what do you think that adds up to?
There's no way it's anything less than outstanding news for real estate.
Sure it's true that there are still very tough situations out there on job losses and pockets of severe unemployment where local companies are laying off hundreds of people, but on a national basis, the forces driving real estate right now are increasingly turning positive and encouraging.
Take last week's mortgage interest rates. Though they were already close to all-time lows, rates fell again last week to 4.6 percent on average for new 30-year fixed loans, and 4.5 percent on average for 15-year fixed loans, according to the Mortgage Bankers Association.
Home sales in major markets around the country have shown dramatic gains in the past month. In the Chicago metro area, sales were up 38 percent in Cook County, 65 percent in Lake County and 51 percent in Kendall County.
The Chicago Tribune interviewed Mark Zipperer, an agent for ReMax Edge in the city, and he said: "I am so thankful. It's like after a drought, it's (suddenly) raining." Shoppers are suddenly out looking at houses again -- and they're making offers!
In Florida, statewide sales jumped by 30 percent in March over year-earlier levels, and were up 33 percent over the previous month. Even condo sales were up by 25 percent.
Similar gains were reported in California markets hardest hit by price declines during the past two years. Statewide sales rose 64 percent in March compared with March of 2008. Unsold inventory is now just five months -- that's down from 12 months the previous March.
And here's a possible indicator of things to come: Median house prices may be bottoming out. The California Association of Realtors reports the median price of homes sold was up by 2.2 percent for the past month. Prices are still down by 40 percent or more from the boom year peak in many areas, so even the slightest increase is a surprise event.
Meanwhile consumers across the country say they're feeling better about their economic futures, which is always an important factor for future home purchases. The Conference Board's Consumer Confidence Index hit its highest point for the year this month, with the "expectations index" component up by 65 percent over February.
What's it all add up to? We call it a turnaround getting underway.
