Real Estate Market Battling Back In 2009
Housing reports released during the month of March have brought strong indications that the real estate market has begun its recovery.
According to the National Association of Realtors, existing homes sales increased 5.1 percent in February 2009—which is the biggest percentage increase of existing homes sale in five years.
Chief economist at the National Association of Realtors, Lawrence Yun, told the Wall Street Journal, “The biggest complaint during the housing-market boom years was that middle-class home buyers were priced out. Now that prices are declining, it’s giving them a chance to enter the market.”
Aiding in the increase of home sales is the affordability of real estate for first-time home buyers. The combination of low mortgage rates, which are roughly 5%, and an $8,000 tax credit given to first-time home buyers who purchase real estate before Dec. 1, 2009, are boosting the real estate market. According to a survey of Realtors, first-time home buyers accounted for half of February’s home sales.
So far in 2009, housing reports have shown an increase in sales for single-family homes, resale homes and new homes. According to the Wall Street Journal, in January 2009 home prices rose for the first time in 10 months. In “Home Prices Rose in January,” the WSJ reported on the Federal Housing Finance Agency’s findings that home prices increased 1.7 percent.
February 2009 also saw favorable numbers as single-family home sales in Miami, Fla., rose 68 percent and condominium sales increased by 71 percent from February 2008.
“The increase in sales in the Miami market over the last seven months shows a clear, strong upward trend indicative of a market recovery,” said Rick Burch, 2009 Chairman of the Realtor Association of Greater Miami and the Beaches.
Resale home sales are also on the incline in Miami. The city, known for its magnificent beaches, great nightlife and top-rated restaurants, has seen its resale homes sales market increase 70 percent from February 2008 to February 2009. “We expect sales to continue to rise in the coming months, and once distressed properties are not a major force, prices will begin to rebound to normal levels,” said Burch.
According to the California Association of Realtors, single-family home sales in California rose 83 percent from February 2008 to 2009. Another positive sign the housing market is bouncing back is the length of time a home is listed on the market. In February 2008, a single-family resale home in California would spend a medium of 69.3 days on the market; just 12 months later California single-family resale homes are spending an average of 51.5 days on the market.
On a national level, new home sales rose 4.7 percent in February 2009 from the month prior. Though the new home market is seeing steep competition from the existing homes market—mainly because of lower listing prices—increases in sales is helping deplete inventories. As of February 2009 there are roughly 330,000 new homes for sale, which is the lowest number the new home market has seen in about seven years.
In “Jump in Home Construction Raises Hope,” posted on March 18, the Wall Street Journal reports on government findings of a 22 percent increase in home construction in February 2009, compared to January 2009. The article indicates that new home construction is up in single-family and multi-family dwellings.
—Lauren Varga
