What’s Driving The Market?

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The advent of spring has unleashed a new lease on life for
the housing market. Sales are up.
Inventory is down. Prices —
which have been hovering at the
bottom for a while — are now
slowly rising. So are bank-issued
mortgages.
It is a spring awakening, and
it’s happening nationwide.
“It’s the strongest first quarter
since 2007,” says Ken Fears, a
senior economist with the National
Association of Realtors
(NAR). “It’s a very strong and
very atypical market.”
Major banks such as JPMorgan
Chase and Wells Fargo reported
strong quarterly earnings,
indicating that buyers are again
jumping into the market. JPMorgan
issued 6 percent more mortgages
than a year ago and received
33 percent more applications,
according to the Associated Press.
Wells Fargo issued 54 percent
more mortgages compared to last
year.
The NAR’s most recent quarterly
numbers show that prices of
existing single-family homes rose
in 74 out of 146 metropolitan
areas compared to the same period
a year ago. In the fourth quarter of
2011, only 29 areas showed gains
from a year earlier, according to
the NAR.
The association also reports
encouraging sales numbers. Sales
of existing single-family homes
and condominiums rose 4.7 percent
to a seasonally adjusted
annual rate of 4.57 million in the
first quarter. That’s 5.3 percent
above the 4.34 million mark
during the first quarter of 2011
when sales spiked.
Fears, the NAR economist,
says a confluence of events is
responsible for the good showing.
Strong employment gains, low
interest rates (hovering around 4
percent), a relatively warm winter
and a stable stock market boosted
consumer confidence. Throughout
the fall, consumers have been
eyeing the lucrative interest rates,

but uncertainty in Europe and at
home and the morbid employment
numbers, forced many to sit on the
fence, Fears says. Spring came with
better news.
“All of the sudden, people
realized it’s a good time to get in,”
he says.
Markets are rebounding across
regions. States such as California,
Texas and Arizona, which were
hardest hit by the bust, are now
gaining momentum as investors
are lapping up properties with
unbeatable prices. In cities such as
Seattle and Palo Alto, Calif.,
agents and sellers are witnessing
bidding wars on homes, which
shows that the market is slowly
turning around.
In the Northeast, existing
home sales jumped 8.6 percent in
the first quarter of 2012 and are 6.6
percent above the first quarter of
2011. In the Midwest, sales rose 5.5
percent in the first quarter and are
11.7 percent higher than a year
ago. In the West, sales rose 5.9
percent in the first quarter and are
1.4 percent higher than a year ago.
Meanwhile, sales in the South
increased 2.1 percent in the first
quarter and are 4.1 percent above
the first quarter in 2011.
Fears says areas such as the
Midwest, where prices weren’t
affected as much by the downturn,
are faring well now.
In the Indianapolis area, the
resurgence is pretty telling.

“What I did last year in sales, I
already did in the first three
months of this year,” says Beenu
Sikand, a Realtor with Prudential
Indiana Realty Group. “I believe
the economy is finally picking up.”
Sikand says the Super Bowl,
which Indianapolis hosted in
February, helped revive the city’s
real estate market. Investors are
coming in and buying distressed
properties with cash. Prices are not
rising, but sellers are not experiencing
huge losses either, she says.
It’s still a buyers’ market, but
homes priced right are selling fast.
In Colorado, too, inventory is
on the decline.
“In this business it’s all about
supply and demand,” says Sally
Grenier, broker/owner of Metro
Brokers/Grenier Real Estate,
outside of Denver. The state is
experiencing higher sales volume
because of shortage in inventory,
Grenier says.
Fears expects the ripple effects
of the market’s resurgence to carry
on through the summer.
“This is the bottoming year for
prices, and we see price gains
already, even though the gains are
not evenly distributed throughout
the country,” Fears says.
He expects prices to be flat or
show a slight uptick this year. But
sales, he says, will be up 8 to 10
percent compared to last year.
Madhusmita Bora/CTW Features

Source:  Dallas Morning News

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Filed under Before Buying a House, Flower Mound, Lakeside DFW, Open House, Real Estate, Texas, Uncategorized

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