One big leap for housing
I just bought a pair of rose-colored glasses. They’re not doing much to block the sun’s rays, but they sure are helping my view of the real estate market, which is why I’m not taking them off any time soon.
In mid-September, the August housing statistics were published, indicating a jump to their highest levels in more than two years. The national statistics showed that new single-family housing starts in August rose by 5.5 percent from July to their highest level in 28 months. This was reported by the Commerce Department, which said that builders started construction of 535,000 homes in August, and also reported that overall housing starts were up by 2.3 percent.
Previously owned home sales were also up in August by 7.8 percent from July to their highest level in 27 months. The National Association of Realtors reported that sales were up by 9.3 percent from a year ago, which is the 14th straight year-over-year increase in sales. Zillow’s statistics indicated that in 91 of the 177 real estate markets they track, home values were up from a year ago.
And CoreLogic topped off the impressive growth reporting a 6.9 percent increase in home prices in the second quarter from three months ago. This appreciation has lifted more than 1.3 million homeowners who were underwater above the water line.
Naturally, any movement in the real estate market is great news for the overall economy. New construction creates jobs, and selling and buying activity in the resale market translates into the sale of everything from paint to appliances for the home. Since the recession, the housing market has weighed down the recovery resulting in Americans feeling less wealthy and less comfortable spending money on everything in their lives.
Locally, our real estate market is also showing substantial improvement. Total sales in Manatee County in August climbed 5 percent from July and 29 percent from August of last year, and the inventory level is bordering on a traditional seller’s market of 4.6 months worth of homes available. This is considerably better than the national level of 6.1 months of available inventory, which is a significant improvement from 8.2 percent last year.
In addition, our sudden low inventories of available homes have resulted in a 9 percent increase in sale prices in Manatee County from a year ago. The state of Florida also is showing a real improvement with sales up 10.8 percent in August for single family homes and sales prices up 5.8 percent from a year ago.
Although things certainly are looking rosy, there are still plenty of indicators pointing to proceeding with caution. One of the reasons the statistics look so good is partly because the 2011 numbers were so bad. On a national level, even with the improvements in new home starts, they are still well below what they were in pre-bubble years.
Also, inventories continue to be lacking because of the large number of homeowners who are either underwater on their mortgages or far below what they paid for the property during the bubble years and are holding off putting their homes on the market. Obtaining financing is still a challenge for many potential buyers because they may have too much debt, poor employment histories and a lack of cash.
For the time being, I’m hanging on to my rose-colored glasses and keeping a close eye on the numbers. One of these days I’ll trade them in, but not just yet.
