Shrinking Inventory and Rising List Prices: Continuing Signs of a Recovering Housing Market
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There are positive signs spanning the spectrum indicating a turning real estate market despite some weak spots across the country.
Just a few days ago, USA Today reported that the number of existing homes for sales had dropped 22 percent from a year ago and now totals just 2.37 million units. This is down 41 percent from the peak reached in mid 2007. That said, the National Association of Realtors ® reported rising prices in 74 of the 146 markets they track in the first quarter of 2012 versus declines in 72 locales. Even more significant is the dramatic decline in some of the hardest hit markets:
- March inventory in Phoenix declined 64 percent from a year ago according to Arizona State University real estate expert.
- NAR reports very tight inventories in Phoenix, Orange County, California, Naples, Florida, Seattle, suburban Washington, DC and North Dakota (driven by the energy boom being experienced in that state).
- While mortgage delinquency rates remain above average (with average being 2 percent), they dropped from 6.19 percent in Q4 2011 to 5.78 percent in Q1 2012 according to TransUnion (based on a sample of 10 percent of US mortgage holders) and are down from a 7 percent peak in Q4 2009
- All-cash transactions in Q1 2012 made up 31 of all sales—and I doubt these people would be buying and paying cash if they thought property values would decline further
- 22 percent of all buyers were investors
- Condominium prices rose 3.4 percent when compared to Q1 2011
- Q1 2012 existing home sales were up 5.3 percent from the same period in 2011 and are now running at annualized rate of 4.57 million
- Total existing home sales in Q1 2012 were at the highest level since 2007
- Move.com reports that many of the hardest hit markets are now among the top recovering markets