For the first time in as long as I can remember, reading the business news is like a real estate love fest. Heck, it’s like being at my own Democratic or Republican National Convention: We’re great, the housing market is improving and anyone who disagrees is an idiot and clearly not paying attention. So cast your vote for me because I called a bottom to the housing market over a year ago and had you listened and bought you would already have made money. Sounds convention-ish doesn’t it?
What makes me say all this? Shoot, a day can’t go by without someone saying that housing is the bright spot of the economy. Consider this week for example. Nationally both prices and sales it was reported are up. In fact sales were up 2.3% month over month and a whopping 10.4% year over year. Only in our area, in the West, we’re sales down month over month but that is a reflection of low inventory, insufficient to satisfy buyer’s demand. Even more dramatic was that despite flat month over sales numbers, prices median prices were up 24.5%! Of course median means half the sales were above and half below, so it’s not a direct correlation to a home’s price but rather an indication that more expensive homes are selling and that pulls the median price up. Still, it’s very impressive because of what it suggests, namely that there are fewer distressed properties selling at below market prices. It also hints that there is an increasing move up market, something that has been missing over the past several years. It also suggests financing of more expensive homes may be getting a little easier too. So no matter how you slice it, real estate is doing what it does – leading us out of recession.
But resale is only part of the picture. The other part is construction. Specifically new home construction. A few days ago I wrote that the rise in permit applications was foretelling a construction related recovery for our national economy. Today’s new home sales numbers reported not only a month over month increase but a staggering 23% year over year increase. 23%! Yes indeed, the good news just keeps on coming.
“The floor recognizes the distinguished speaker from California…” Ahhh, I love my own convention… Sales are up, prices are up, rates are low, builders are building to address the need for housing and everything as I can tell is looking up. Now if we can just stop with the stupidity of ‘you can’t get pregnant if you’re really raped,’ are you a citizen and the importance of the P90X workout, and get down to dealing with important issues like the fiscal cliff we’re about to fall off of, which according to the nonpartisan CBO, will throw us into recession if allowed to happen. Yes, at my convention we’ll ride the wave of the ever improving housing market, because that’s one thing we can all agree on, an improving housing market is good news indeed.