Remember all those times we wondered, “Will the housing market recover?” “When will we see signs of recovery?” “Are we there yet?” The answers are: Yes! Now! Oh, Yeah!
It’s not a surprise, either. All of 2013 has shown steady increases in home sales, with existing home sales leading the way. New home construction is trickling back from the deep construction low that followed the housing market’s collapse, but the numbers are nowhere near keeping up with the current surge in demand.
Additionally, “distressed homes – foreclosures and short sales – accounted for 18 percent of May sales” reports Realtor.com, the ratio, holding steady from April, is the lowest percentage posted since 2008. As those typiclly discounted homes clear the market and “shadow inventories” dwindle away, fewer distressed home sales can account for some of the increased average (while previously the high numbers of distressed homes could be blamed for low average home salve prices). With distressed home inventory’s influence over the average home sale price decreasing, average home values are surging off the artificial decrease as well as increasing off the limited overall supply. Simply put, part of the price increase is due to fewer discounted foreclosures dragging down the average, and partly because there just aren’t enough homes for sale.
In-demand markets like Las Vegas, San Francisco, and Phoenix, and the prime neighborhoods in many other areas are showing the most rapid price jumps due to buyer competition, but home sale prices are increasing all over. The national association of Realtors reports the median sale price of existing homes rose 15% in May 2013 from May of 2012.
The housing market is hot and fierce right now with buyers in some areas going to great lengths to beat out the competition, and sellers are feeling the relief as home values increase. These conditions could continue for the remainder of 2013, but the rapidly recovering housing market is on the verge of shifting to something ultimately far better overall: a normal healthy housing market! Instead of the drastic highs and lows that have made buyers and sellers into losers and winners over the past few years, a lot of really good-for-the-economy stuff is already in the works.
Home starts are ramping up, bringing builders back with construction jobs and homes for the inventory-starved buyers. Mortgage rates are increasing (yes, this is a good thing), winding down the massive stimulus programs of the Federal Reserve. While still below historic averages, higher lending rates increase the value of the dollar and are a good sign that the economy in general, if not the individual homebuyer.
Recovery is now, but normal is still on the horizon, so take advantage of the momentum this year, and look forward to a happily steady and less dramatic, healthy housing market in the near future.