The housing market is finally coming back!
It may be a slow comeback but it’s a positive development.
If we date back to September 2011, we can see the first signs of improvements in the housing market. We still got a long way to go but numbers in March of this year are promising! Ninety-nine markets showed improvement in March, which is a dramatic step up from December when there were only 41 markets. Yet in the form of a glut of unsold properties and tight lending banks, big challenges lie ahead. The recovery may be slow and bumpy but the worst of the six-year slump looks to be over.
It probably won’t be a rocket-ship recovery but improvement can be seen in areas where job growth has increased, which results in more consumers looking at a home purchase in a more positive perspective. It is expected that new home sales in 2012 will post their first annual increase in seven years, rising 12 percent! Realtors are actually seeing higher traffic volume and are moving more houses off the market than a few years ago. Now, what about the builders? An index that measures confidence among homebuilders has shown that Mach has held a near four-year high and is anticipated to increase in sales over the next six months.
Unfortunately, whenever there is improvement there are always challenges that come along. KB Home, the fifth-largest U.S. homebuilder revealed that net orders for new homes declined 8 percent in its first quarter as cancellations rose. Also, in the last month, the inventory of new homes on the market was unchanged at a record low of150, 000 units. At that pace it would take about 5.8 months to clear the houses from the market, which is higher than the 5.7 months in January.
To wrap things up as a whole, NAHB Chief Economist says, “After five consecutive months of solid gains, the March IMI held virtually flat this month at just under 100 metros, while showing a significant amount of transition in terms of markets represented on the list. This is consistent with NAHB’s projections for a gradual but patchy recovery in which some month-to-month softening is likely, particularly in places where the measurable gains have been very small. The bottom line is that roughly one quarter of all U.S. metropolitan areas are showing signs that their housing markets have turned the corner, which is a very positive development.”
Although the housing markets seem to have a few downs here and there, the overall improvement proves to be promising for this year. Slow improvement is better than no improvement!