High Demand – Where are all the Homes?
Residential sales in your neighborhood—in fact, all real estate dealings anywhere—remain the most local of commercial transactions. If your house is in San Francisco, a price spike in suburban Newark is probably of little interest, unless you plan on moving anytime soon. Even so, the new projection for overall U.S. residential sales had to perk up area homeowners’ interest.
The “best home sales market in eight years” was the forecast—along with “mortgage originations that will likely rise” and “larger gains in newly built home sales.” residential sales may make up but a tiny fraction of the data contained in CoreLogic’s analyses and data announcements, but any homeowners looking for a strong spring market couldn’t help but be buoyed by last week’s prognostications.
The basis for the surprisingly robust residential sales prediction was supported by a number of other data sources which have gradually confirmed solidification of the overall economic picture. With many economists agreeing that the U.S. economy “is poised to grow by close to 3%” this year, a heightened level of housing demand is bound to result. If that mark is achieved, it would be for only the second year in a decade. Gains in employment (in the 3-to-3½ million person range) are also expected.
The improving economic projection for 2015 was ascribed to three forces. The halving of energy prices which began last summer was deemed “unlikely to jump back up this year.” Anyone who’s been enjoying the freefall in prices at the pumps will appreciate the immediate impact that has on family wallets.
The second positive force is psychological, and very real. The rise “in consumer and business manager confidence” in the recovery has been widely noted: the Conference Board (“up 4.9 points”); U.F.’s Confidence Index (“the highest reading in 10 years”); Small Business Optimism Index (“3rd highest reading since 2007”).
CoreLogic’s third factor was one that hasn’t been much talked about until now: governmental. Apparently, tax receipts have been stronger than expected, freeing state and local governments to spend more. That’s an unexpected economic stimulus—and of a kind that should be more welcome than some of the previous “let’s just create more money” variety.
CoreLogic puts residential sales growth in the area of 5%. Will our numbers match those projections? One reason to think so is the mortgage rate phenomenon. Rates remain tantalizingly low—but apt to begin creeping upward. That’s the kind of spur to home buyers that is apt to work as effectively as merchants’ “limited time sale” technique: tick! tick! tick!
If you have been delaying wading into the residential sales arena until the time is right, 2015 certainly looks like that time has arrived. I’m standing by to help you take advantage of the many opportunities this summer market is offering. Why not give me a call?
Melania Mirzakhanian, Broker
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