Those in the housing industry don’t want to get their hopes up too much about this year’s spring buying and selling season. But it’s hard to deny that the market is looking less dire this year, as recent indicators show a pickup in sales.
“Conditions are coming together to encourage people to want to buy homes,” said Doug Duncan, vice president and chief economist of Fannie Mae, in a news release. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”
Nearly half of consumers polled in Fannie Mae’s National Housing Survey in March expect higher rental prices in the year ahead. And 33% expect home prices to rise in the year, the highest percentage recorded in more than a year. Forty-four percent think their personal finances will get better over the next year.
As a result, 73% of the 1,000 Americans polled think it’s a good time to buy a home.
Some industry watchers have stopped trying to guess how the housing market will perform in the future, since this market has been down so long and so many predictions have been wrong in the past. But the conditions may be right for the housing market to finally start looking a little bit brighter this year.
The Phoenix market, one of the hardest hit during the nation’s housing bust, is now starting to gain some steam.
The rebound is “driven by strong economic growth, once in a generation affordability levels, and a surge in investment activity that far surpasses the levels during the housing boom,” according to a report from John Burns Real Estate Consulting.
Prices fell 57% from 2006 through mid-2011, according to the report. Around the middle of last year conditions started to improve, due to a combination of more investors and foreign buyers in the market, a shrinking for-sale inventory and strong job growth.
“Months of supply is now at a very low 2.4 months, down from nearly 5 months just one year ago and over 12 months in early 2008. Months of supply has not been this low in Phoenix since late 2005 when sales activity was at feverish levels,” the report read.
It’s worth mentioning that there’s a seasonality to Phoenix. Snowbirds flock here during the winter and the MLB Cactus League’s Spring Training is a highlight in March. Visitors may have seen real-estate opportunities in Phoenix during their trip this year, according to the report.
“The true test of Phoenix housing-market strength will be this summer, when these favorable elements subside and the housing market will stand more on its own,” the report said.
Source: MarketWatch — Amy Hoak
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