Courtesy of William Raveis Exceptional Properties
It’s a pretty exciting time for the real estate industry--major indicators are at last pointing towards the beginning of a recovery in the housing market. After consecutive years of uncertainty, fear and an all out loss of hope that things would get better, strong first quarter numbers are showing thawing compared to last year and green shoots for the spring market. The Commerce Department last week reported that new home sales in March were up by 27 percent, hitting their highest levels since summer of 2009. And a hot-off-the press report by the National Association of Realtors stated that pending home sales in March rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0.A granular look at state activity helps reinforce some of these numbers: Connecticut- Sales in CT up nearly 30% to 4,318 units compared to 3,374 at this time last year- In Fairfield County, sales were up over 50 %; Hartford County experienced a 20% increase- Greenwich saw a 230% increase in sales, according to MLS statistics- Upward push in median prices-for example, Darien experienced a 31% increase; could suggest high-end sales are starting to show movementMassachusetts- 10% increase in median price for the state; 11%, 9% and 10% for Suffolk, Norfolk and Barnstable Counties respectively- Wellesley had a 110% increase in sales compared to this time last year- Sales spike; Suffolk, Norfolk and Barnstable Counties experienced a 15%, 21% and 19% increase in sales, respectivelyNew York, Westchester County- Huge increase in sales throughout the county, up 69% compared to this time last year- Individual towns, such as Rye, saw an incredible 127% increase in salesRhode Island
- Average market time state-wide is down almost 50%
- Newport County experienced a 42% increase in sales
- North Kingstown had a nearly 50% increase in salesFor how long will these positive trends continue? There has been widespread speculation on what is causing this spur in market activity, with many fingers pointing towards the recently expired home-buyer tax credit. According to the New York Times, “the credit has caused a surge in sales and has been widely lauded for helping to stabilize prices.” However, how will the market fare without this buoy? Several factors are in place to potentially sustain recovery without the credit. The National Association of Realtors projects “sales of existing homes will rise 6.6 percent this year to 5.49 million as a drop in prices, near record-low mortgage rates and growing incomes sustain demand beyond the recent pickup spurred by the government incentive worth as much as $8,000.” These factors are part of NAR’s affordability index-a metric taking into account property values, mortgage rates and incomes-which stood at 176 in February, eight points off the record high reached in January 2009. In addition, recent reports by the Fed indicated that national “economic activity continues to strengthen” and that “labor markets are beginning to improve.” Bottom line is, aforementioned underlying economic factors as well as key housing activity metrics seem to be moving from a staccato to a steady turnaround. Keep watching for critical numbers, such as consumer spending and confidence, growth in jobs and mortgage rates when keeping track of future housing activity. And be sure to frequently check how these national trends are impacting your area’s market by visiting our housing data matrix at http://www.raveis.com/localhousingdata.asp. Once here, adjust the drop down menu to your state and town and click “search.” You can then select any of the tabs, though we suggest the Housing Data Matrix. This snapshot by state, county and town provides live, real-time MLS data as opposed to relying on a publication’s compiled statistics. If you’d like, also subscribe to our newsletter to receive monthly market reports for your town at http://www.raveis.com/marketrptsubmap.asp.