Existing home sales jumped 7.8% in the U.S. in August for over 4.8 million dollars in value!!
That data is the very best we have seen in the market since May of 2010……..when sales were fueled largely by Federal Home buying Tax credit. At the same time, this new report indicated that the housing market was 9.4% better than the same month in 2011. That is a significant increase in just 1 year.
These figures were just released by the government 2 days ago, and certainly shows that the housing market is leading the way toward economic recovery in this country.
Here is an interesting statistic contained in the report……..Foreclosures accounted for only 12% of the August sales and Short Sales only accounted for only 10% of the sales. This is a leading indicator, that the huge supposedly “Ghost” inventory of foreclosure inventory soon to bombard the market……..really does not exist. It has long been my opinion that lenders and banks are holding onto assets and plan to rent them out thru local property management companies, to obtain and maintain an income stream. With an increase in home sale prices we have witnessed during the first half of this year, equity positions for homeowners has begun to creep back into the mix.
New construction on the rise after a 6 year steady decline that started in 2006!
On the home building front, the Commerce Dept. said 9/18 that construction for single family homes rose 5.5% [535,000 homes nationwide] and is the best performance since spring 2010. Their report went on to say that applications for building permits did fall in some areas of the country, but overall nationally showed an increase. One factor in our local market that is pushing buyers toward new construction, is the low-level of current re-sale homes on the market. In a normal market there is usually a 6-8 month supply of available inventory, and we currently have only a 2-4 month inventory supply. The problem with building in our local market is finding a lender or bank that offers loans for the lot purchase thru the construction phase and traditional 30 year fixed rate mortgages, upon completion.
One thing that needs to happen to bring both the re-sale and new construction markets back quicker………is to get lenders back into the market and actively lending money. The pendulum has swung to far to the left, and needs to come back closer to center where credit could open up a bit more for the consumer. I think there is too much government oversight being done on loan packets going into underwriting for approval. I have heard that NAR [National Association of Realtors] is working toward that aim, and pressuring lenders to free up mortgage money..