The highly anticipated housing recovery is beginning to bloom, according to some industry experts reviews of the most recent existing home sales.
"Home sales are still very low,” admits Paul Dales, chief economist at Capital Economics, however, “it is clear that housing recovery is now well underway.”
He alludes to the evidence, clearly home sales have been on the rise for the past three months, posting a 5 percent increase in December alone.
Chief economist for the National Association of Realtors (NAR) Lawrence Yun, agrees with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”
Yun goes on to say that consumers are gaining confidence from “record low mortgage interest rates, job growth and bargain home prices.”
NAR reported a 1.7 percent annual increase in existing-home sales in 2011, in addition to the 5 percent increase in December, topping out at 4.26 million homes for the year.
According to NAR’s existing home sales report:
- Distressed homes made up 32 percent of sales for the month in December.
- Also for the month of December, foreclosed homes sold closed at nearly 22 percent below market rate, a discount 2 percent higher than those previously recorded a year earlier.
With 21 percent of homes sold in December to investors, investor demand remains steady, with buyers taking 19 percent of purchases in November, while averaging 20 percent one year ago.
On another note, according to NAR, housing inventory is on the decline and fell to its lowest level since March 2005 last month. “The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.
Optimistically, Dales believes sales will continue to rise this year. “Housing still won’t contribute much to GDP growth over the next few years, but at least it will no longer subtract from it,” Dales says.