In this holiday shortened trading week, the release of economic data has been sparse in many areas with the exception of housing. Real estate has taken center stage this week and my holiday report is here to bring you the highlights.
The
most important thing to note is that the housing reports ALL are showing that
the market continues to gain momentum in recovery. Demand for housing is up, foreclosures are
down, and prices are on the rise.
Monday
started out with the release of the existing home sales report. Sales of existing homes have been bouncing up
and down and in October sales rose 2.1 percent up to an annualized rate of 4.79
million. Although the prior month’s
numbers showed a decline of 2.9%, the good news in the report is that the
decline is attributed to lack of inventory.
It is the lack of homes for sales that is holding down the numbers, not
homebuyer desire to purchase. Housing supply
is down from 5.6 months in September to 5.4 months for October which is the lowest
rate in 6-1/2 years.
There
are many buyers looking for homes and the biggest challenge is locating
them. I look in my own area and I can
see that practically every house that comes on the market is sold within a
matter of weeks. I am excited in that I
believe that as homeowners learn about housing demand and price stability, little by little we will see a significant
amount of sellers making the decision to no longer hold off on selling and place
their homes on the market for sale.
The
home builder's housing market report is the highest it has been in the last
6-1/2 years as well. Builders are very optimistic about the future of housing
and they are moving forward with plans to build as their six month outlook for
housing shows modest gains. The fact
that the number of distressed homes available for sale has declined continues
to be one of the main driving factors of builder optimism. The biggest challenge facing building at the
present time is the continued tightness in the lending markets.
The
final piece to the builder side of housing is that housing starts continue to
grow at a strong pace. New home building
increased 3.6% in October which follows a giant 15.1 percent revised surge in
September and a 3.0 percent gain in August. The only slight negative in the report is that
housing permits declined 2.7%. Most
experts don’t appear concerned by this drop for the fact that permits surged
11.1% in September. With the exception
of October, housing permits have been trending sharply higher over a good
portion of the year.
JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com
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