Housing Shifts Into Higher Gear in October
By: Brian O'Connell

NEW YORK (BankingMyWay) — Positive reports on the U.S. housing market have moved from a trickle to a torrent as home values rise, inventories shrink and homes sell faster than at any point in the past four years.

Take San Diego, where the Greater San Diego Association of Realtors reports that the $400,000 median price of a home in the region is 13% higher than last year.

Smaller homes, especially townhomes and condos, have really taken off. The GSDA says that those prices are up 19% in the same period. Single-family home sales are up 10% on a month-to-month basis, and single-family home sales are up 34% from October 2011.

Those numbers have local real estate agents raving — in a good way.

“There’s really only positive, encouraging news in these new numbers,” association board president Donna Sanfilippo says. “You can’t help but feel good about what we’re seeing in the San Diego County real estate market. Homes are moving and prices are increasing. If our recent first-time homebuyer clinic is any indication, which turned into a standing-room only event, San Diego is becoming a real estate town again.”

It’s not just San Diego.

Seattle-based Redfin, an online real estate broker, says U.S. home sales increased in October by 21.8% across 19 U.S. major housing markets. Additionally:

  • Home prices rose 8.4% from the same period in 2011 in those markets.
  • Inventories have slackened, as the number of available “homes for sale” across the U.S. slid by 29% (and have fallen 5% from September to October).
  • Lower inventories means U.S. homes are selling more rapidly, with the percentage of homes selling within 14 days of appearing on the market rising by 28%.

All in all, housing market reports these days are showing good if not great improvement and should encourage homeowners anxious over the value of their homes.

"With supply low, and the economy slowly improving due to record-low interest rates, demand has increased,” notes Glenn Kelman, chief executive at Redfin. “Household formation is now at a record high, and high demand and low supply drives prices up.”

“The $64,000 question is whether more people will list their homes for sale in 2013,” he adds. “Based on the conversations our agents have been having with homeowners, we think they will. We also believe that demand among homebuyers will increase, though that prediction has become less certain late in the year. Almost no new Redfin customers are touring homes right now, fewer even than last year.”

That trend could be changing – and fast, Kelman adds.

“But those who have been touring are writing offers at record levels,” he says. “Everyone wants to get married on the first date."

That obviously hasn’t been the case for years among homebuyers, especially first-time homebuyers.

But the housing market terrain is shifting, and in favor of a long-neglected group – the U.S. homeowner.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

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