From The KCM Crew, http://www.KCMblog.com
“While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity.”
This preceded NAR’s Existing Home Sales Report which showed closed sales were up 10.4% over last year. Prices were also up 9.4% year over year. NAR expects existing home sales to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.
And even though new construction sales showed a 25% increase over last year, Yun explained that should not dramatically impact prices:
“Falling visible and shadow inventories point toward continuing price gains.Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand.”
Housing is in the middle of a recovery without a doubt.
Do National Real Estate Headlines Actually Influence Local Markets?
This is a question we are frequently asked. Local real estate professionals know the best information for either buyers or sellers is local market data. However, we must realize that what happens in the national real estate market dramatically impacts regional and local markets. For example:
Are 30 year mortgage interest rates in North Dakota under 4% because of what happened in the their market over the last few years?
Of course not. They benefit from lower rates because of what happened in the national economy (if not the world economy).
Buyers all over the country are concerned about the reports of distressed properties about to come to market and what impact they will have on house values. The truth is only a handful of states will be adversely affected. However, if overall consumer confidence is shaken, every market is impacted. This is why it is important that you work with a real estate professional that understands three things:
- What the national headlines are saying and why they are saying it
- What effect the issue may or MAY NOT have on your local market
- How to simply and effectively explain both of the above to you
Agents who just ignore national headlines are hiding their heads in the sand. Agents who use the headlines as scare tactics to unfairly influence the actions of their customers are engaging in unethical behavior. Agents who take the time to keep abreast of the national real estate issues and are patient in explaining how these issues will impact you in the local market are true professionals.
The first two types of agents could cost you dearly. The last group will maximize the outcome of your real estate transaction – both personally and financially.
From The KCM Crew: http://www.KCMblog.com
Last week, the National Association of Realtors (NAR) released their Pending Sales Report which showed that contracted sales were 12.8% higher than the same month last year and higher than any time since sales were impacted by the Homebuyers’ Credit back in April of 2010. The index stood at 101.4 which represents a level that is “historically healthy” (see methodology below).
Here is a graph showing pending sales over the last twelve months:
METHODOLOGY (as per NAR)
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.
by The KCM Crew
For the last couple of weeks, all we have heard is how bad the current economic situation is. “The markets are going to crash and interest rates are going to skyrocket.” Panic has definitely engulfed the entire country.
Consumer confidence, as measured by the University of Michigan’s Consumer Sentiment Survey, has fallen to a number not seen in thirty years. This panic has actually had a negative impact on the economy.
It was said best by Mark Zandi, chief economist at Moody’s Economy:
“Confidence normally reflects economic conditions; it doesn’t shape them…
Yet at times, particularly during economic turning points, cause and effect can shift. Sentiment can be so harmed that businesses, consumers and investors freeze up, turning a gloomy outlook into a self-fulfilling prophecy. This is one of those times.”
What does the data actually show?
We decided to look at certain economic indicators and compare them to the numbers from a year ago. Here is what we found:
We are not making the argument that the current numbers are worth celebrating. We are only suggesting that the sky is not falling.
Conditions aren’t as dire as some are professing. Make good sound financial decisions based on your own economic conditions. There is no need to panic.