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No, The Housing Comeback Is Not Taking A Pause
The Business Insider (Money Game Contributors): April 22, 2013
Here are a few excerpts from a Reuters article: Existing Home Sales Fall as Prices Rise Most Since 2005
U.S. home resales edged downward in March, a pause in the housing market recovery that has helped boost the economy
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Nationwide, the median price for a home resale rose to $184,300 in March, up 11.8 percent from a year earlier, the biggest increase since November 2005. The limited supply of available properties is pushing up home values.
First, this isn't a "pause in the housing market recovery". The housing recovery is based on residential investment, and only the commission on existing home sales is included in residential investment (the main contributors are new home sales and home improvement). A decline in the headline number for existing home sales due to fewer distressed sales, is a positive, not a negative!Second, the median price is a poor measure of overall market prices since this reflects changes in the mix in addition to changes in prices (the repeat sales indexes are a better measure of price changes).
Note: Lawler used the median over the weekend to show that investors are buying at a higher price point - an appropriate use of the median price.The NAR reported total sales were up 10.3% from March 2012, but conventional sales are probably up over 20% from March 2012, and distressed sales down. The NAR reported (from a survey):
Distressed homes - foreclosures and short sales - accounted for 21 percent of March sales, down from 25 percent in February and 29 percent in March 2012.
Although this survey isn't perfect, if total sales were up 10.3% from March 2012, and distressed sales declined from 29% of total sales to 21%, this suggests conventional sales were up sharply year-over-year - a good sign. However some of this increase is investor buying, although the NAR is reporting investors are buying about the same percentage as a year ago:
Individual investors, who account for most cash sales, purchased 19 percent of homes in March, down from 22 percent in February; they were 21 percent in March 2012.
Other data suggests investor buying has increased, see Housing: Some thoughts on Investor Buying, Inventory and recent Price Increases and from the WaPo: Wall Street betting billions on single-family homes in distressed markets Of course inventory is the key number in the NAR report.
The NAR reported inventory increased to 1.93 million units in March, up from 1.90 million in February. Some of this increase was seasonal, and this is still a very low level of inventory. And inventory is still down sharply year-over-year; down 16.8% from March 2012. But this is the smallest year-over-year decline since 2011.
Forbes names Phoenix among fastest-growing cities for population, economy
Click here for more on the Forbes report
Forbes magazine named Phoenix as one of the fastest-growing cities in America, but a trio of cities in Texas top the list.
Forbes says the list was compiled by assessing the 100 most populous metropolitan statistical areas (MSAs) and their surrounding suburbs as defined by the U.S Office of Management and Budget. Factors assessed were the estimated rate of population growth for 2012 and 2013, the rate of job growth in 2012, and the rate of gross metro product/economic growth for 2012.
Phoenix ranked No. 8 overall. To see the rest of the top cities, click the image above.
Here's how Forbes broke down Phoenix:
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MSA: Phoenix-Mesa-Glendale, Ariz.
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2012 Population growth rate: 1 percent
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2013 Population growth rate: 2.7 percent
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Job growth rate: 2.5 percent
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Unemployment: 6.5 percent
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Gross Metro Product: 4.1 percent
Home prices: Biggest rise since housing bubble
By Chris Isidore – CNN Money March 26, 2013
Home prices continued their recovery, rising 8.1% in January, although a separate report showed a slight slowdown in new-home sales.
The S&P Case-Shiller index, which tracks the 20 largest markets in the nation, showed the biggest year-over-year gain in prices since June 2006.
"This marks the highest increase since the housing bubble burst," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Related: 5 best markets to buy a home
In a separate government report Tuesday, new homes sold at a 411,000 annual rate in February, down nearly 5% from the January sales pace but up 12% from year-earlier levels. The typical price of a new home sold in the month was $246,800, up about 3% from both the January and a year earlier.
Joseph LaVorgna, chief U.S. economist for Deutsche Bank, said that bad weather in February could be partly responsible for the slowdown in sales. But he said market fundamentals suggest that the market for new-home sales should remain strong.
"Despite the pullback in sales in February, the uptrend in housing remains clearly intact," he said. He is forecasting even stronger sales in the second half of this year.
The Case-Shiller report shows the recovery in home prices is widespread. All 20 markets posted a year-over-year gain, and the pace of increase picked up in every market except Detroit.
Some of the markets hurt the most by the bursting of the housing bubble have enjoyed the biggest gains, led by a 23% rise in Phoenix. Prices were also up more than 10% in San Francisco, Las Vegas, Detroit, Atlanta, Minneapolis, Los Angeles and Miami, all markets that had been hit hard by foreclosures. Click for more
