After nearly a four year slowdown in home sales in the hardest hit areas of the country some housing markets are in for a rebound, according to a new Housing Predictor forecast. The rally will be evident by late summer.
Near historic low mortgage rates, pent up buyer demand and even improving consumer confidence in real estate values attribute to the change for markets in the west, south-west and southern states. It’s a rebound of epic proportions for an industry besieged by the credit crisis and it signals that stabilization will develop in the housing market.
Signs of a recovery in housing are beginning to manifest with the upswing in sales and an 11 percent increase in building permits in February. The shift does not, however, demonstrate that housing inflation or appreciation will develop in most areas for a number of years. But rather improvements are beginning to show markets in particularly hard hit areas are beginning to shift, according to analysts.
Half of all households can now afford today’s median home of $200,000, according to the National Association of Homebuilders. “Foot traffic in new homes is on the rise and consumer interest is increasing with each passing day,” said NAHB Chairman Joe Robson, a builder in Tulsa, Oklahoma.
In Florida, where the housing depression first developed with an onslaught of hurricanes, sales of existing homes and condos have risen for six straight months. Home sales have also grown more than five percent in the rest of the nation as buyers realized the bottom of the market may be near.
However, the majority of sales are of foreclosures or short sale properties in which the lender agrees to take a loss as a result of the all-time record number of foreclosures. The median sales price of existing homes in Florida in March was $141,900, down from $199,300 last year, which equates to a 29 percent drop in price.
Foreclosures are driving home prices to levels not seen since the 1980s in North Port, Florida and other areas, returning the city to a place where retirees can afford a home for the winter or full time.
In economically slammed California, the inventory of homes listed for sale dropped to slightly below seven months from 16.6 months a year ago, according to the California Association of Realtors. Existing home sales increased 100.8% from a year ago, and it’s the first time since October, 2005 that California has seen existing home sales of over 600,000 homes in a single month.
Home sales in Nevada and Arizona markets are also increasing as a result of lower prices. The $8,000 federal home buyer tax credit is sparking interest in home buying. The U.S. Census Bureau says home buyers can purchase a home for $20,000 less on average than in February, 2007 and save $500 on the monthly mortgage as a result of low interest rates and lower prices.