On Thursday, the National Association of Realtors (NAR) said its seasonally adjusted index for pending sales of existing homes rose to a reading of 106 in April, up 10.3 percent from a year earlier.¬† ‚ÄúThe housing market continues to squeak out gains from already very positive conditions,‚ÄĚ said Lawrence Yun, the group‚Äôs chief economist.
Economists view pending home sales as a measure of signed contracts to purchase homes.¬† The data suggests that the U.S. housing market is continuing to recover.¬† The first quarter of 2013 was also a bullish period for the real estate industry.
According to the Home Price Index, a monthly housing metric from the Federal Home Finance Agency (FHFA), U.S. property values climbed by close to two percent between January and March of this year.¬† Q1 2013 marks the seventh consecutive quarter of growth.¬† Home values increased by 7 percent nationwide compared to the same period last year.
‚ÄúHousing continued to rebound, with housing starts recording a 27 percent gain for the year while new home sales rose 20 percent from 2011,‚ÄĚ the NAR stated on its website. ¬†‚ÄúExisting home sales grew by 9 percent during the year, with shrinking inventories driving up prices of existing homes.‚ÄĚ
The West Coast is seeing the biggest gains.¬† California is the hottest regional market in this recent resurgence.¬† According to a report by the Wall Street Journal, the number of homes sold in recent months that had been flipped has reached the highest levels since late 2005.
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Real estate agents, who make their commissions on transactions, are happy to see the higher turnarounds in home ownership. ¬†Cal-American Corporation, which invests and manages commercial and residential properties throughout the state, is seeing favorable opportunities in their business.¬† ‚ÄúWe were named in the Inc. 500, and I personally was named as one of the top 30 realtors under 30 years old in the country,” says Jessie Rodriguez, a licensed realtor in San Bernardino County.
Additionally, real estate firms such as Cal-American are seeing declines in foreclosed homes on the market. ¬†Of the previously owned homes sold in April, only 13.5 percent were foreclosures.¬† In April 2012, foreclosed properties represented 30.3 percent of sales.
‚ÄúCommercial real estate recorded a year of growth and expansion,‚ÄĚ according to NAR. ‚ÄúFundamentals strengthened throughout the year, with declining vacancies and rising rents. ¬†The apartment sector was the bright star, as office and industrial spaces found favorable conditions. With a strengthening foundation, investment sales found a higher ledge on their climb from the depths of the 2008-09 Great Recession.‚ÄĚ
The Home Price Index tracks the change in a given home’s value between subsequent sales.¬† The index is benchmarked to a value of 100, which is meant to represent the U.S. housing market as it existed in 1991.
‚ÄúIn March 2013 — for the first time since February 2009 — the Home Price Index topped 199. More important, though, is that the Home Price Index has climbed for 14 straight months, which suggests that the U.S. housing recovery is a little more permanent than economists originally believed,‚ÄĚ according to the Mortgage Reports.
In the current market, buyer demand is strong.¬† Entrepreneurs are ‚Äúflipping‚ÄĚ more houses (buying and selling a home in less than six months).¬† Mortgage rates also remain favorable.
The Federal Reserve‚Äôs bank prime loan remained at 3.25 percent.¬† ‚ÄúWhile [higher rates] may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks,‚ÄĚ Frank E. Nothaft, Freddie Mac vice president and chief economist, said earlier this week.