In fairness, what this means to us is that we have switched from a
buyer's market to a sellers market and most transactions are taking
place without discounting. It still has to expand somewhat before we
see forward momentum in the market. It is clearly good news and we
can hope to see rapid growth in the new homes market to absorb this
burgeoning demand. Yes it is time to get aboard if it works for you.
What it also means is that a lot of demand stranded by the banks
while they sorted themselves out is now coming back into the banking
system. They have really sorted things out or at least know the
number.
All this leads to a growing economy over the next several years.
US home prices up
9.3 Percent, Most in Nearly 7 Years
By Associated Press
April 30, 2013
WASHINGTON—U.S. home
prices rose 9.3 percent in February compared with a year ago, the
most in nearly seven years. The gains were driven by a growing number
of buyers who bid on a limited supply of homes.
The Standard &
Poor’s/Case-Shiller 20-city home price index increased from an 8.1
percent year-over-year gain in January. And annual prices rose in
February in all 20 cities for the second month in a row.
Phoenix led all cities
with an annual gain of 23 percent in February. Prices jumped nearly
19 percent in San Francisco. In Las Vegas, home prices increased 17.6
percent and in Atlanta they rose 16.5 percent.
Eleven of the 20
cities reported price gains in February compared with January. Those
monthly numbers are not seasonally adjusted and reflect the slower
winter buying period.
The index covers
roughly half of U.S. homes. It measures prices compared with those in
January 2000 and creates a three-month moving average. The February
figures are the latest available.
Steady hiring and
near-record low mortgage rates are driving up demand, helping sustain
the housing recovery that began last year. Buyer traffic was 25
percent higher in March than it was a year ago, according to the
National Association of Realtors.
At the same time,
prices are surging because buyers have fewer homes to bid on. The
number of homes available for sale has fallen nearly 17 percent in
the past year to 1.93 million, the Realtors’ group said last week.
At the current sales pace, that supply would be exhausted in 4.7
months, below the 6 months that is typical in healthier markets.
Home prices nationwide
are still about 30 percent below their peak reached at the height of
the housing bubble in August 2006. They are only back to where they
were in the fall of 2003.
And Stan Humphries,
chief economist at Zillow, a real estate data provider, cautioned
that the national figures are being skewed by sharp rebounds in
cities hit hard during the housing bust, including Las Vegas and
Phoenix. Investors are helping drive up prices in those cities.
“This report needs
to start being taken with a grain of salt, Humphries said. “The
appreciation rates we’re currently seeing … are not broadly
reflective of what’s happening in the national housing market right
now.”
Steady home price
gains can help drive the housing recovery. Higher home prices
encourage more people to buy before prices rise further. They can
also entice more homeowners to sell by making them more confident
they’ll get a good price. In addition, higher prices raise the
equity people have in their homes, which makes selling more
profitable.
But many homeowners
still owe more on their mortgages than their homes are worth. That
can make it difficult to sell.
Higher home values can
also help the economy. They increase homeowners’ wealth, which
encourages more spending. Consumer spending drives 70 percent of
economic growth.
Sales of previously
occupied homes leveled off over the winter but may increase in the
coming months. A measure of signed contracts to buy homes rose to a
three-year high in March.
Homebuilders are also
starting work on more new homes and apartments. That creates more
construction jobs. Builders started work on more than 1 million homes
at an annual rate in March. That’s the first time the pace has
topped that threshold in nearly 5 years.
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