The housing market, once battered and bruised, is finally starting to turn around with great optimism towards a much needed recovery. Some experts even believe it could be the beginning of another housing boom.
Below are eight KEY real estate home price indicators and are all reporting strong, positive increases in home prices moving forward.
HOME PRICE MEASURES:
1. Core Logic Home Price Index
2. FHFA (Federal Housing Finance Agency) House Price Index
3. Zillow Home Value Index
4. Case-Shiller Home Price Index
5. Radar Logic Home price Index
6. Existing-Homes, Median Sales Price
7. New Homes, Median Sales Price
8. Trulia Asking Price Index
With the housing market showing improvement in home prices and buyer demand, the Federal Reserve’s aggressive actions to keep the mortgage rates low have increased home buyers’ purchasing power while boosting more affordability.
Real estate agents will tell you they are very busy and that are buyers out there, that homes are selling quicker and are even getting multiple offers, too!
The signs of recovery have been evident with posts on CNN Money: Home prices, home sales and construction. Foreclosures are down at a 5-year low and the Federal Reserve has acted to push mortgage rates to keep at near record lows.
Construction is expected to be even stronger, with numerous experts forecasting home construction to grow by at least 20% a year for each of the next two years. (Some believe building could be back near the pre-bubble average of about 1.5 million new homes a year by 2016, about double the 750,000 homes expected this year).
Stephen Kim, an analyst with Barclays, "In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts."
Home builder stocks are up 162% in the last 12 months, led by a 250% jump at PulteGroup (PHM). Other leading builders including DR Horton (DHI), Toll Brothers (TOL), KB Home (KBH) and Lennar (LEN) have all seen their stocks more than double over that time. Also, new orders at publicly-traded builders are up 30% since January, according to Kim.
Reported by CoreLogic: Prices End 2012 With Biggest Annual Gain in Six Years!http://www.dsnews.com/articles/home-prices-finish-year-at-six-year-high-2013-02-05
The Case-Schiller index of home prices shows a sixth straight month of year-over-year increases. http://therealdeal.com/blog/2012/11/27/home-prices-continue-rise-for-sixth-straight-month-spcase-shiller/
Jed Kolko, the Chief Economist for the real estate website Trulia, compiles a “housing barometer” that measures how close the real estate market is back to normal based on housing starts, existing-home sales, delinquency and foreclosure statistics. His most recent reading put the housing market at 52% back to normal, (see picture).
"...Not only is the housing market closer to normal than at any other point since the crisis, the recovery is also accelerating."
Sellers may be waiting until the spring ‘buying season’ to list their homes for sale but they shouldn’t wait until the spring:
1.) Demand Is High
Homes are selling at a pace not seen since 2007. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that annual sales in 2012 increased 9.2% over 2011. There are buyers out there right now and they are serious about purchasing.
2.) Supply Is Low
The monthly supply of houses for sale is at its lowest point (4.4 months) since May of 2005. The current month’s supply is down 21.6% from the same time last year. Historically, inventory increases dramatically in the spring. Selling now when demand is high and supply is low may garner you your best price.
3.) New Construction Is Coming Back
Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative to many purchasers.
4.) Interest Rates Are Projected to Inch Up
The Mortgage Bankers’ Association has projected mortgage interest rates will inch up approximately one full point in 2013. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
5.) Timelines Will Be Shorter
The dramatic increase in transactions caused many challenges to the process of buying or selling a home in 2012. We waited for inspections, dealt with last minute appraisals and prayed that the bank didn’t ask for ‘just one more piece of paper’ before issuing a commitment on the mortgage. There are fewer transactions this time of year. That means that timetables on each component of the home buying process will be friendlier for those involved in transactions over the next 90 days.
As always, wishing you all the best!