Tuesday, May 15, 2012

More Positive Real Estate News

Here's some more positive news coming out today about the recovering U.S. real estate market, which might have reached a major turning point in the month of April. 

1. California Spring Home Buying Season Off to Strong Start, Home Sales and Price Post Impressive April Results  --  "California home sales and median price both jumped in April, with sales shooting up to their highest level in more than two years, and the median price rising above $300,000 for the first time in 16 months.  

"A brighter economic picture, coupled with record-high housing affordability, pushed the spring home buying season off to a strong start," said California Association of Realtor President LeFrancis Arnold. "With a continuing improving economy and interest rates declining to new record lows in recent weeks, we should see a steady improvement in the housing market throughout the end of the year." 

Sales in April were 10% higher than March's pace and 11% higher than in April 2011.  The statewide median price of an existing, single-family detached home climbed 5.7% in April to $308,050, up from March's revised $291,330 median price and 4.7% from a revised $294,140 recorded in April 2011. The median price rose above the $300,000 mark for the first time since December 2010."

Note: This marks the 26th metro or state market that is reporting double-digit gains in April for either home sales or median prices, or both, see full list here.

2.  Bloomberg -- "Confidence among U.S. homebuilders jumped more than forecast in May, reaching a five-year high that signals an improving outlook for construction. The National Association of Home Builders/Wells Fargo index of builder confidence rose to 29, the highest since May 2007, a report from the Washington-based group showed today. The gauge exceeded the highest projection in a Bloomberg News survey in which the median estimate was 26." 

3. The SPDR S&P Homebuilders Index has been trading at close to four-year highs in recent days, and has risen by 30% over the last six months, compared to a 10% gain over the same period for the S&P 500 Index.


3 Comments:

At 5/15/2012 8:43 PM, Blogger VangelV said...

LOL

Come on Mark. California just announced that its budget deficit went up from a projected estimate $9 billion to $16 billion as the state lost revenues thanks to high earners going elsewhere. At the same time we look at the U-3 and find it at 11% even as the underemployment rate is stubbornly over 20%. We know that 30% of those people who own their own homes are under water and that there is a massive amount of shadow inventory ready to hit the market every time prices look like they are firming. I suspect that by the time the election has passed we will be hearing of the UNEXPECTED reversal in fortunes.

 
At 5/15/2012 9:25 PM, Blogger Mark J. Perry said...

So April homes sales did NOT go up by 11% compared to last year? Or if they did go up by 11%, that's a negative sign? Or are the real estate data distorted like the CPI so that we can't really trust the report? Seems a little "alien" to me.

 
At 5/15/2012 9:33 PM, Blogger VangelV said...

So April homes sales did NOT go up by 11% compared to last year? Or if they did go up by 11%, that's a negative sign? Or are the real estate data distorted like the CPI so that we can't really trust the report? Seems a little "alien" to me.

The noise is not important so stop grasping at it to paint a picture that is not supported by reality. The fact is that CA is in huge trouble and that real house prices have a long way to fall before they go up again. For markets moves to be sustainable it is important that markets are permitted to clear. That has yet to happen because of all of the meddling by the Fed and Treasury.

 

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