National housing market showing some signs of life
This article from FoxNews.com highlights one of the main attractions to the Greater Phoenix area real estate market — even as our supply dwindles, prices remain low relative to “the boom years” of the mid-2000’s. For those who qualify for financing, interest rates remain close to all-time lows. Neither of these dynamics will last forever.
Here’s the article:
It’s hard to make any firm categorical statements about today’s economy, but recent data and anecdotal evidence suggests that the battered housing market is finally on the rebound.
Homeowners, if they’re still fortunate to own a home through the past few years, have endured precipitous drops in valuation, and many still have homes that are worth less than what is owed to the bank. Nonetheless, in places across the country there’s evidence that prices are on the rise.
Analysts report that historically low interests rates, foreign investors and natural market forces are driving home prices back up. This week’s report by S&P/Case-Shiller showing prices in the nation’s largest metropolitan areas up by 2.2 percent gives credence to the sense that at least in some places the housing market is on an upward trend.
After delaying her retirement by a year because of the economy, Sheri Gingerich is now a new homeowner in one of the hottest places in the country–Phoenix. The housing market there is heating up, too.
“To find [a home] on a golf course that was affordable compared to five years ago was to me astronomically the exact thing that worked out to our benefit,” Gingerich said while taking a break from moving into her new home outside Phoenix. The Minnesota native paid $240,000 for the home far enough from the fairway–she hopes–not to attract wayward golf balls. She says the house would have cost considerably more a few years ago and that she wouldn’t have been able to afford it then. But now, the perfect retirement home fits perfectly into her budget.
Gingerich’s realtor says business really picked up at the start of the year and has kept on going strong even into the usually slow summer months. “Oh my God, it’s just been a really great experience the last couple of months with people coming in and really feeling like this is the time to buy,” Kathleen McMullen said. “So I think [buyers] attitudes are all upbeat and I think the economy is taking a shift and Phoenix is really coming back–bouncing back quickly.”
McMullen’s data shows homes that once were on the market for nearly a year are now selling in a month or two and that Gingerich is part of a trend. “Right now, the good news is, in the Phoenix area — all the cities around Phoenix — all of the home values have increased up to 3 percent. And in other places [too]. So, this is not a unique experience at all.”
The chief economist for the National Association of Realtors says while Phoenix may be a hotter market than other places it’s not too far out of line from the national picture. “The market is showing improving signs,” Lawrence Yun recently told Fox News. “We have seen the home sales rise roughly 10 percent higher this year compared to last year. And it looks to close out the year at a five-year high. So we are beginning to see a much improved condition after some tough years in the prior years.”
Yun attributes the rise in prices to an influx of buyers from overseas or investors with lots of cash who are able to buy homes as investments. Nonetheless, he added, “the first time buyer still comprise about one-third of the market. So you are seeing a very broad-based recovery. Everything from New England, Florida, middle America to the Western coast, the sales are improving.”
As for the rest of the year, Yun predicts a modest increase in home prices and bases that on historical trends of supply and demand about inventory.
“Historically, the supply and demand balance has been about a six month supply of inventory. Now in the past few years it’s been in the double digit months of inventory so there are too many sellers in relation to the buyers. Now the market is roughly in balance and historically when that is the case home values rise roughly three to five percent annually.”