'Sustainable' Housing Recovery Under Way?
NEW YORK (BankingMyWay) – Since 2008, the U.S. housing market has performed like an 18-wheeler with five or six tires blown out.
But after four years in the ditch, the housing market seems to be back on the road to recovery – even if it’s only operating in first gear.
That’s the conclusion drawn by analysts at Turner Investments, a Berwyn, Pa.-based money management firm.
In a report, Turner says a “true recovery” is under way. That recovery won’t benefit just long-struggling homeowners, but also homebuilders and other segments of the construction market, who should see improvement in earnings and in their stock prices, Turner analysts say.
The report sees “rising levels of new-home demand, home prices, home construction and homebuilders’ confidence as signs of an improving housing market.”
There are a few caveats, as the Turner report sees “a few more stumbles along the way.” But the larger picture is increasingly brighter for the housing market.
More narrowly, the July numbers coming out of the California housing market show continued signs of growth.
According to the California Association of Realtors, home prices in the Golden State “posted strong gains” last month, with the market showing year-over-year growth for the fourth consecutive month.
Fueling statewide housing growth is a strong jobs picture in and around San Francisco and a shortage of available homes in the central part of the state, says C.A.R. President LeFrancis Arnold. “A robust economy in the San Francisco Bay area and a relatively larger inventory at higher price levels is helping to fuel sales and prices,” he says.
Homebuyers seem to be finally biting on more expensive homes, as properties in the $500,00-and-above price range are selling in greater numbers. The C.A.R. reports that it’s been smaller, less expensive homes – in the $200,000 category – seeing the lion’s share of sales growth.
Now growth in the higher-priced home sector is apparently expanding, while cheaper home sales are in decline.
“The strong performance in the median price over the past few months reflects a sales shift away from homes in the lower price ranges of the market due to stark inventory toward sales of homes priced above $500,000,” said C.A.R. Chief Economist Leslie Appleton-Young. “As an example, in July, sales of homes priced below $200,000 declined 9.4% from the previous year, and homes priced above $500,000 climbed 27.7% from a year ago.”
The median home value in California now stands at $333,860, up 4.2% from June 2012. The time it takes to sell a California property is down, to 43 days as of July from 51 days in July 2011.
With two strong reports coming out this week, the U.S. housing market seems to be gathering momentum. That’s great news for the economy, and better news for beleaguered homeowners.
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