The past few years have conditioned me to avoid seeing the good news even in seemingly great news. There seems to be a naysayer around every corner, not many of whom make their livings from real estate commissions. Having said all of this, let’s consider the following.
National Economic Outlook and Housings Contribution:
According to Fannie Mae’s Economic & Strategic Research Group, economic growth is expected to increase modestly compared to 2011. Consumer spending is up slightly and manufacturing and services expanded significantly. It was pointed out that the year-end growth rate was a by-product of a growth of business inventory, which is not considered an indicator of consumer demand or the health of the economy. The outlook was considerably more positive as it related to unemployment. The Group also reported that housing showed improvement late in the year with existing home sales rising in October, November and December. If this trend continues, housing will likely add to the gross domestic product (GDP) for the first time in 7 years. Read that last sentence again. It’s hard to paint that with too black of a brush! The report itemized a somewhat familiar list of global constraints that will likely continue to challenge economic growth, but the Group suggested that the economy appears to be more resilient than it has in recent months. All in all, I’d say this report card is a keeper.
National Existing Home Sales at 2-Year High:
The National Association of REALTORS® utilizes their index of pending home sales as a benchmark for the housing industry’s health. According to this index, contracts leading to the sale of existing homes is at a 2-year high. Normally based on a scale of 100, the index climbed 2 points to 97 in January. This level was 8% better than in January of 2011 when the level was recorded at 89.8. The January 2012 level of 97 was the highest since April 2010 when the home buyer tax credit inflated the index to 111.3. The January numbers saw every region of the country improve when compared on a year-by-year basis. Like the Fannie Mae Group above, Lawrence Yun, NAR’s chief economist, mentioned the improving unemployment rate prominently among other factors which influenced this improvement.
State and Local Area Market Trends:
North Carolina also enjoyed this upward trend in existing home sales. On a year-to-year basis, North Carolina REALTORS® experienced a 5% growth over January 2011, a level which exceeded expectations. Brevard County REALTORS® led the state with a year-to-date sales growth of over 100% in total dollar sales. Asheville and Washington/Beaufort County ranked 2nd and 3rd with 54% and 32% increases, respectively. Brevard County also took top honors with 60% price appreciation, while Washington/Beaufort County and Rocky Mount followed with 46% and 37%, respectively. CLICK HERE for the details of the reported statistics.
While all of the supporting articles associated with this report are cautiously optimistic, we must be thankful that we are seeing positive numbers in the housing market that are not outwardly driven by massive tax credits, etc. Let’s keep on keepin’ on!
Thanks to RISMedia and NCAR for the supporting stories.