Carpe Diem

Housing sales reports for March indicate an ongoing recovery

Over the last week, many metro areas have released housing sales data for the month of March, and every report so far indicates strong home sales and price gains last month, here’s a sample:

1. Houston home sales increased 17% in March, and the median sales price rose 6.5% to an all-time record high of $172,000 for the Houston area. The Houston Association of Realtors commented: “It’s hard to tell that the spring home buying season has begun because real estate transactions throughout Greater Houston never slowed during the traditionally quieter winter months. The addition of nearly 119,000 jobs over the past 12 months and the resulting need for housing, combined with continued low interest rates, helped make March Houston’s 22nd consecutive month of positive home sales.”

2. The median price for homes sold in the San Francisco Bay area in March increased by 21.8% to $436,000, posting the 12th consecutive year-over-year gain, the tenth consecutive double-digit gain and the fifth back-to-back monthly increase above 20%. The share of distressed sales (foreclosures and short sales) last month – at 30% – was the lowest in 5 years.

3. For the state of California, the median price for homes sold in March increased by 24.7% from a year ago, and marked the 13th back-to-back month of an increase in home prices on a year-over-year basis. Foreclosure sales, as a share of all homes sold in March at 15.2%, was the lowest since September 2007.

4. Austin-area home sales rose 16% in March, spent 26% less time on market, and sold at a median price 10% higher than a year ago.

5. The median price for Minneapolis-St. Paul area homes sold in March was $176,000, an increase of 17.4% over last year. Closed sales were flat in March compared to a year ago, but pending sales increased more than 6% despite a 31% decline in inventory that is holding back an even more robust housing recovery.

6. Dallas-Fort Worth area home sales increased by 22% from a year ago, and the median sales price increased by 8% to a new record high for the area.

7. Kansas City home sales increased by 7% in March from last year, and the average price increased 5%.

8. Metro Milwaukee home sales rose 11.3% in March from a year ago, the 21st consecutive monthly increase, while the average sales price increased 9%.

9. Orlando home prices were up by 22% in March.

10. In Tucson, the median sales price for homes sold in March was $150,050, up 13% from March 2012. The average home sales price in March was $198,009, up 14 percent from $173,890 in March 2012.

MP: There is a consistent pattern developing across the country: 1) home prices are steadily increasing, in most metro and state areas now by double-digit percent gains from a year ago, with gains above 20% being increasingly more common (e.g. Dallas, Orlando, San Francisco in March), 2) median home prices in some metro areas like Houston and Dallas are at record highs, 3) homes are selling faster, often with multiple offers and at selling prices that are above the list price, and in some markets before they even get listed for sale, 4) distressed properties (foreclosures and short sales) are declining as a share of all sales, and 5) the supply of homes for sale in relation to buyer demand in many areas is the lowest in a decade, and the tight inventory is holding back what could be an even more robust recovery.

As I’ve mentioned before, the sign of a housing recovery is when “more homes are selling faster at higher prices,” and that’s exactly what we’ve got now.  2012 will be known as the “year of the US housing recovery,” and based on housing sales activity during the first quarter of 2013, there are no signs of a slowdown, and we can expect housing to continue to be a bright spot in the US economy this year.

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