Finally, several years after the first real rumbles of the financial crisis, the national real estate market seems to be on the road to normal. The online real estate site Trulia actually claims that the housing market is 64% of its way there, as compared to being 36% of normal a year ago. Now, we do know that “normal” is a bit of a subjective term, but it cannot be doubted that the national real estate market is rebounding and, dare I say it, recovering. Here are a few tidbits to support this position:
Although inventory climbed throughout the summer, when aggregated the year-to-year decrease in inventory from August 2012 to August 2013 was 11.2%, which is pretty encouraging. The decrease in property for sale means that people are buying, and putting their trust in the economy to do so. Actually, new home sales hit their highest levels since the spring of 2008 in June, and the Commerce Dept. claims that sales of new single-family homes reached a five-year high that same month.
Listing prices have also been steadily climbing, and according to the Case/Shiller home price index, home values rose 12.4% between July 2012 and July 2013. This is good news for those wishing to sell property, though of course increased sales often leads to increased inventory.
Upped home values also help underwater mortgage holders get back above water, encouraging people to stick out their mortgages and avoid default. On a related note, another indicator of recovery is the drop in the role that distressed sales, like foreclosures and short sales, have been playing in the overall housing market. Apparently, during the height of the financial crisis distressed sales made up almost half of the market, whereas now that number has dropped to less than 15%.
These changes are truly encouraging. Now, of course we must tread with caution, but it seems the worst may be behind us. It’s time to move forward and take advantage of these improving and almost “normal” conditions.