There are many pundits out there outwardly lamenting the “softness” of the housing market throughout the course of 2014. It is true that there were some problems with the housing market following an explosion of growth through 2013. Historically speaking everything is fine, however, from a short-sighted standpoint one can almost see why some of our experts are a bit worried. 2014 started off slow for a myriad of reasons – weather, a lack of inventory, and less distressed properties for sale – but it started to come along as the selling season went into full swing. So, is all of this worry “much ado about nothing” or is there some validity to the word making its way around the housing market? Spring Home Buying Season is Healthiest in 3 Years Move, Inc. recently revealed that this spring’s housing market finished stronger than any time in the last 3 years. Jonathan Smoke, chief economist for realtor.com explained:
“This is the first time, since the beginning of the recovery that we expect to see positive momentum throughout the second half of the year. While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum.”
Existing Home Sales are Up The National Association of Realtors (NAR) announced that the existing-home sales increased in July to their highest annual pace of the year, according to a recent report. This, even though distressed property sales fell to 9%, the first time they were in the single-digits since NAR started tracking the category in October 2008. Lawrence Yun, chief economist for NAR explained:
“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market. More people are buying homes compared to earlier in the year and this trend should continue.”
Surge of New Construction According to Market Watch, new construction is surging:
“Construction on new U.S. homes jumped 15.7% in July to the highest level in eight months and starts were revised up sharply for June, indicating a pickup in home building after an early-year lull. Housing starts climbed to an annual rate of 1.09 million last month…Economists surveyed by MarketWatch had expected starts to climb to a seasonally adjusted 975,000 in July.”
Foot Traffic at Year High Numbers Foot traffic is the number of people out actually physically looking at homes. There has been a strong correlation between foot traffic and future contracts for home sales (it can be viewed as a peek ahead at sales trends 2 to 3 months into the future). The latest foot traffic numbers show that there are more prospective buyers currently looking at homes than at any other time in the last 12 months which includes the latest spring buyers’ market. Should we worry that the 2014 market has been too soft and that the market’s climb is coming to a glorious end? Well, with numbers continuously increasing we believe that it is premature to suggest that the market is growing soft. If you were to look closely you should be able to see the market continuing its growth.