Housing market gaining momentum – sales and prices up across the country

 

More “green shoots” sprung up for the nation’s housing market this week. On Tuesday, the National Association of Realtors reported that existing home sales rose in April and remain above year-ago levels, and home prices nationwide continued to rise as well. And on Wednesday, the Commerce Department said that sales of new homes rose 3.3 percent in April from March to a seasonally adjusted annual pace of 343,000. That was slightly more than what most analysts had expected.

Both reports are just the latest in a recent string of reports that suggest a housing recovery is finally taking hold across the U.S. We’ve certainly seen a good turnaround in many parts of the Bay Area for some time now. But the recovery has been more tepid in some other parts of the country, so these reports come as very encouraging news for the housing market as a whole.

The improving existing home sales and prices were across all regions of the U.S., NAR pointed out. Sales increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million in April from 4.47 million in March. April’s total was 10 percent higher than the 4.20 million-unit level a year ago.

“It is no longer just the investors who are taking advantage of high affordability conditions,” said Lawrence Yun, NAR’s chief economist. “A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices.”

Yun pointed out that the decline in both listings and the so-called shadow inventory – the anticipation of distressed homes soon to come on the market – has shifted the housing sector in the U.S. from a buyers’ market “to one that is much more balanced, but in some areas it has become a seller’s market.”

That’s certainly the case for us here in the Bay Area, where a shortage of homes on the market – as much as 50 percent below last year in some areas ­– has led to many multiple offers for a single home and sale prices above the list price, sometimes way above.

Nationwide, NAR reported listed inventory of homes for sale is 20.6 percent below a year ago. As a result, there is a 6.6-month supply of homes on the market at the current sales pace, down from a 9.1-month supply last year at the same time.

At the same time, the national median existing-home price for all housing types jumped 10.1 percent in April from a year ago to $177,400. That followed a 3.1 percent increase in March and marked the back-to-back price increases from a year earlier since June and July of 2010, when the gains were less than one percent, Yun said.

New home sales also enjoyed strong gains in April to an annual rate of 343,000, almost 10 percent higher than a year ago, according to the Commerce Department. Gains were broad-based with three of the four regions in the U.S. showing improvement (only the South saw a decline). And the median sale price of new homes sold last month was $230,000 –up 4.9 percent from April 2011.

To be sure, the nation’s housing market still has a long ways to go to get back to peak of the market over the past decade when as many as two million homes sold in a single year. And economic headwinds still face the market, everything from high unemployment nationwide to a stubbornly slow economic recovery.

Nonetheless, we’re moving in the right direction once again heading back to a much more normalized market. And yes, we may have a long ways to go to get back to the top, this week’s housing reports serve to underscore just how far we’ve come from the bottom.

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