As we anxiously look for positive economic signs, the National Association of Realtors released a report on the first quarter housing activity. Since consumer spending is the major force driving the economy, any uptick in housing activity is seen as encouraging.
The National Association of Realtors (NAR) reported that the median price for a single-family home in Q1 was 13.8% lower than in Q1 a year ago. But first-time buyers represented half of all purchases and many went for foreclosures and short sales. The Federal income tax credit of $8000 for first time buyers is certainly influencing this statistic. The distress sales “typically are selling for 20% less than traditional homes,” according to the NAR, and this skews median prices downward. On a hopeful note, 18 of the 152 metro areas in the survey reported price increases. Thus, the market is still very much price driven, as all sellers have to compete with the thousands of short sales and foreclosures on the market.
Equally hopeful was the fact that in many areas, the number of homes for sale continued to drop in April. Some analysts see this as a sign the housing market is nearing a bottom, especially since inventories have historically increased in April. As more and more short sales and foreclosures are absorbed, market prices should become better balanced.
Finally, at last week’s NAR conference, the CEO of the International Council of Shopping Centers pointed out that demographics are in our favor. The high school graduating class in 2010 will be the biggest in our country’s history. As that huge cohort moves forward, it will generate lots of economic prosperity, beginning in the near future.
We knew that it wouldn’t happen overnight, but slowly and surely the housing market will rebound. Any positive news is welcome news!
Author:Anne Ortiz (Maximum One Realty Greater Atlanta)