Sign, Sign, Everywhere a Sign
Inventories are down, consumer confidence is rising and all signs indicate the housing market is on its way back.
By Camilla McLaughlinOn the Road to the New Normal
The ongoing debate over the recovery may seesaw depending on the latest stats on the economy, jobs and home sales, but, no matter how you look at it, 2009 will be considered the turning point for real estate.
“Although the economy still has a ways to go, we’re no longer staring into a black hole. In early 2009, nobody knew where the bottom would be. It’s still impossible to say when the economy and our market will bottom out (some think it already has), but very few people think we’re still on the edge of an abyss. The fear of the unknown has been significantly mitigated,” explains Walt Danley with Coldwell Banker Residential Brokerage in Phoenix, Ariz.
Real estate in 2009 made significant gains with even hard hit markets such as Phoenix showing signs of life by year’s end. After a dismal start, home sales began to pick up slightly in April and continued to gain momentum month over month. Consider residential sales in Manhattan, where 2009 began with the lowest level of sales in 15 years, according to appraisers Miller Samuel Inc., and ended up almost 9 percent above the fourth quarter of 2008.
At press time, overall sales nationally were up 44.1 percent for the year (2009 versus 2008, through November). Although the first-time-buyer tax credit boosted entry-level activity, every price bracket saw a sizable upswing in the number of transactions. Through November, sales of homes priced $100,000 to $250,000 surged by 60 percent year over year. The $500,000 to $750,000 bracket saw a 38-percent increase. Sales of $750,000 to $1 million homes grew by 40.7 percent. The $1 million-plus market saw a boost of 39 percent.
As the new year began, even the negative had a positive side. For example, the number of contracts for future sales fell by 16 percent in November, but was still 15.5 percent higher than November 2008.
The almost-three-year slide in home values came to an end, as sale prices finally began to edge into positive territory in October. Overall, prices are comparable to 2003, down 29 percent from the peak in the second quarter of 2006, but still considerably above 2000 levels for every metro except for Detroit, according to the Case Schiller Price Index. During the last 12 months, Denver and Dallas have declined the least. On a month-to-month basis, San Francisco reported positive returns for seven consecutive months; San Diego for six; and Los Angeles and Phoenix close behind with five.
Data from the National Association of Realtors shows the median sale price in Dallas increased 6 percent over November 2008’s median while Houston was up 10.6 percent.
Stabilizing prices are one of the clearest indications that a recovery is gaining momentum. They also stimulate future activity by sending a clear signal to buyers that perhaps the bottom is at hand, the best values can be had now but they won’t last.
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[...] The Road to RecoveryEverywhere A Sign Inventories are down, consumer confidence is rising and all signs indicate the housing market is on its way back. This is the first part in a yearlong series dedicated to tracking luxury real estate’s Road to Recovery.By Camilla McLaughlin [...]
[...] The Road to Recovery Everywhere A Sign Inventories are down, consumer confidence is rising and all signs indicate the housing market is on its way back. This is the first part in a yearlong series dedicated to tracking luxury real estate’s Road to Recovery. By Camilla McLaughlin [...]