NAR Mid-Year Meeting Reviews State of Housing
By Joel Carson
Investment home sales are helping sustain the housing market, according to the 2012 National Association of Realtors Housing and Economic Outlook released May 17 by NAR Chief Economist Lawrence Yun.
The national housing market most certainly influences Utah home sales (and yes, Salt Lake home sales too). Timing is everything. Keep a close eye on the national housing market and you’ll know when the time is right for you to buy or sell a Utah home.
Stagnant Existing Home Sales Show New Movement
For the past four years (2008 through 2011) annual existing home sales remained painfully flat.
When the 2012 first quarter statistics showed an uptrend, many homebuyers, home sellers and smart investors breathed a collective sigh of relief. Quarter one showed the strongest numbers in five years thanks to multiple combined factors that have created an optimal environment for home purchasers.
Housing affordability and job creation are two factors that have weighted heavily in favor of the housing market. The housing affordability index is at about 200 – the highest on record in more than four decades.
The stock market’s recovering from a brutal fall in 2008 is another factor that’s helping would-be buyers get off the fence and get out their checkbooks.
The make-up of our country’s current population is also playing a role in economic recovery. More and more young adults are ready to leave the comfort of their parents’ nests and that means a demand for rental homes. The pool of potential renters is growing. Investors seem encouraged.
Investors capitalizing on low existing home prices and optimum purchasing conditions have helped boost the housing market; and, according to Yun, consumer confidence is steadily increasing.
Smart Investors Seize Moment
Smart investors look for the highest possible return on any investment. In 2005 existing home investment purchases were on fire! About 33 million such homes sold that year. Alas, by 2010 investor confidence reflected the nation’s widely-publicized economic crisis and existing investment home sales plummeted to 1.2 million for the year. In 2011 home affordability was historically high and investors stepped up to bank on about 1.7 million investment properties.
Existing vacation home sales statistics since 2005 are a clear indication that people pulled tighter and tighter on their purse strings. They opted to minimize luxury purchases (not so good for those selling vacation homes). The vacation home sector of the housing market dropped sharply from about 1 million sold in 2005 to about 300,000 sold in 2008. Existing vacation home purchases increased in 2009 to a recorded 400,000 sales; but alas, that’s where the numbers stayed through 2011.
Yun’s forecast for home sales throughout 2013 is cautiously optimistic. He predicts more home sales, increased home prices and a slightly elevated 30-year mortgage rate. My next blog will focus on the highlights of Yun’s forecast, so hurry back.
I have worked in the Utah real estate industry for many years. I’m encouraged by the news and by the work our leaders are doing to bring the housing market back in balance.
I watch the market so I can keep you informed. If you’re looking for a Utah home for sale, browse through our solid inventory anytime (24/7) at www.AllUtahHomes.com. Call me at 801-673-3333 if you have any questions, or want to schedule your Utah home tour.