Home sales and prices are going up

According to the Associated Press, the U.S. national home prices are up 3%from the second quarter of this year. Of the 20 cities measured by the Case Schiller Index, only Las Vegas and Detroit did not indicate price rises. And Reuters, in a recent poll, said that economists in that 20 city index expected that there was 0.2% home price rise in June.

In Florida, where I sell real estate, home sales are up for the fourth month in a row. Broward County showed a 56% increase in July over last year’s sales, and Palm Beach County showed an increase of 32% over July of last year. Home prices are up by less than a percentage point. But the point is, they’re up.

This does not indicate that the troubles in the real estate market are over by any means. Because while home sales are up, so are mortgage delinquencies. After all, the Mortgage Banker’s Association indicates that increasing numbers of homeowners are behind in their payments. And thousands more foreclosures are coming down the road.

However, the fact that home prices are up suggests that we may be have hit bottom and that we’re turning a corner. In March of this year, condo sales in Cape Coral and Fort Meyers were up 7% from last year. By July, single family home sales in Naples were up 40%. And statewide, home sales are up by 18%.

So, while home prices have effectively rolled back to the levels of 5 years ago, home prices have begun to move up from those low levels. Typically, single family home prices in Florida, along with many other areas of the nation that had jumped ahead, have dropped anywhere from 35 – 50%. Condominium prices in numerous neighborhoods ranging from Jupiter to Miami have dropped by as much as 75%.

These drops, as we all know, have put the home prices back into the realms of the possible for millions of families who had been priced out of the market by the irrational exuberance of the real estate boom. These families are taking their hard earned dollars, good credit scores, and desire for a home of their own into this now reasonably priced market. This increased demand is selling more homes and pushing prices up.

The Associated Press says that the Consumer Confidence index rose recently to 54.1. This is not the optimum, but it is an unexpectedly high increase. Perhaps this increased confidence level in our nation has contributed to rise in home sales, and now in home prices.

One very positive aspect to this home sales and price increase has been a fall in the outstanding housing inventory around the nation. Inventories are down from a national average of 16 months to about 8 months. It is always possible that inventory figures may rise again when a new wave of foreclosures hits. But homes are also moving faster. Average days on market have decreased from a high of about 115 down to just over 100.

It appears that the real estate market, always in flux, has rebounded to a large extent. Large price jumps are not likely in the near future. But as home sales continue to rise, and the inventory of unsold homes continues to shrink, home prices will continue their gradual rise.

Written by Marc Jablon, Realty Associates
marcjablon@yahoo.com 561 / 213 – 6139
www.MarcJablonHomes.com