Over the last few months positive data about real estate markets across the nation have been a welcomed and refreshing change from the usual bad news we’ve grown used to. Resale housing sales, which make up the large majority of all home sales, are up 7.2%, according to a recent Twin Cities BizJournal.com article. New homes are faring better too with increases in sales, median pricing and a significant decrease in the supply of new homes.
In May there was a 10.2 month supply, and in July, the supply had dwindled to 7.5 months, the lowest it’s been since July 2007 (not that the market was swell then, but…). In addition, the seasonally adjusted annual rate of new home sales is increasing and has been for most of the year. In March, the seasonally adjusted rate was at 356,00; in July it was at 433,000. The median price of new homes across the nation climbed nearly $4,000 from June to July; it’s been steadily climbing all year (except for a few outlying months).
These numbers might indicate a slow balancing of the market, but it’s too early to tell. I think an important thing to remember is that these national totals do not give you a good snapshot of your local real estate market. For you, things could be worse, or significantly better – either way I’m glad to see supply getting lower. I’ll be ecstatic when it gets closer to a 3-month supply.
To add to good news about a lower supply of new homes, an increase in sales and the steady increase in the median price of new homes mentioned above,
Numbers such as there and most economic reports are starting to show that the real estate market is starting to turn around, and homeowner confidence is gaining.
See more:
New Residential Construction July 2009 – Census Bureau
Housing Starts, Building Permits Dip – CNN Money
The Bloomberg Spin on Housing Starts
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The three-month supply has been in San Diego since around June. I’ll tell you what… It’s tough on home buyers. There are multiple offers on almost all of the entry-level homes. It’s slower at the upper end. That’s where we need a 3-month supply! Hopefully the jumbo lenders will loosen up… but I’m not holding my breath for that.
San Diego Homes´s last blog ..Luxury Homes In Rancho Santa Fe
That’s good news from San Diego Geoff, thanks for chiming in with some stats in your market.
Yes, good news that the figures and statistic going now the right way. We have more phone call and showing now,and it is good signals too.
In my area, the market has always been “controlled” (small town America), so over the last two years, prices have not dropped nearly has much as the national average, even though the supply is still in the 4 to 5 moth range. So I am trying to figure out how to adjust for my area.
Does the 7.2% figure represent a month over month figure or “this time last year” comparison?
Thanks,
BealeD
Your new home construction is almost to the under 6 months of supply which usually seems to the starting point of a good change. I work with a couple of builders in the first time home buyer category $150k is our price point which may seem crazy but in Green Bay WI that get’s you a nice ranch home. I’m having a hard time keeping them on the shelves which is always a good thing
BealeD – they calculate it each month based on the annual rate of sales and current inventory.
This month the (seasonally adjusted) annual rate of sales was 433,000 new homes and there are currently an estimated 271,000 new houses for sale.
433,000/12 = 36083 new homes sold each month
271,000/36083 = 7.5 months
That is great news, now we just the media to start reporting good news and stop with the doom and gloom so we can start to get some consumer confidence back in the real estate market.
I hope more and more markets begin to show improvement… It seems that when the builders are having troubles, so too are many other industries.
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Chapel Hill-Raleigh-Durham was one of the last markets to get hit. In most price ranges we are still experiencing 7-10 months of supply. I am very encouraged to hear about less supply and multiple offers in other markets. I know it is going to take us longer to recover since it took longer to feel the effect.
Chapel Hill Real Estate´s last blog ..Chapel Hill Homes for Sale – Immaculate & Backing to Green Space
This is great news. Real estate seems to recover from the depths of the economic problem. Hope it will continue and much better next year.
Where’s the national media when we need it? Oh wait…they only like to feature the negative news.