Housing Market Recovery
Real estate investors everywhere are rejoicing, as the latest news is that the U.S. is experiencing a much-needed real estate rebound. After years of experiencing a substantial slump, reports are beginning to look positive, as real estate inventory is decreasing and prices are increasing.
This much-needed boost will have an overall trickle down effect on the U.S. economy. In general, when people purchase new homes, their spending increases. Additionally, when people purchase homes, this also means that jobs in the real estate, homebuilding and mortgage industries must increase to accommodate demands. A positive impact of home buying also offers revenue boosts to furniture designers, appliance manufacturers and even carpet companies. Landscapers and nurseries also directly benefit from a boosted real estate market.
In 2012, only 4.65 million homes were sold. This year, real estate experts predict this number will likely increase to 5 million, showing an overall projected increase of 7.5-percent. The housing market also directly affects the Gross Domestic Product (GDP), which has increased 0.6-percent this year and is anticipated to see increases around 1-percent next year. This is only the second increase since the market fell in 2005.
The median home price is approximately 5-percent higher this year over last year and 2014 is anticipated to report gains around 7-percent. Some areas of the U.S. are experiencing higher job growth rates, which includes North Dakota, Colorado and Texas, which are reporting an increase in home sales and home values.
Many areas that once reported higher-than-normal inventories of unsold homes are seeing this inventory decrease. In areas such as Sacramento and San Diego, inventories have decreased by 65-percent within the last year. Areas that were hard hit, such as Boston and Washington D.C. are seeing a reduction in inventory by 20- to 30-percent. Phoenix is also seeing a slight recovery, with home inventories decreasing by 15-percent.
Overall, home inventory nationwide has decreased to a mere 4.2 months’ supply, which is the lowest since the market’s peak in April 2005. Other cities should also see much-needed real estate relief, including: Minneapolis, Minnesota; Salt Lake City, Utah; Portland, Oregon; Austin, Texas; Seattle, Washington; Atlanta, Georgia; and Boise, Idaho. In fact, in some of these areas, sellers are already experiencing bidding wars and builders simply can’t keep up with housing demand.
Some markets may experience a slower recovery. This is anticipated for most of Florida and Nevada, as they were extremely hard hit by the recession and housing market burst. Areas of Connecticut, New Jersey and New York City will take several years before seeing an improvement in their real estate market losses.
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