The latest news from the National Association of Realtors is good. According to their latest survey, home sales rebounded in 49 states during the fourth quarter with 78 markets – just over half of the available metropolitan areas – experiencing price gains from a year ago, while most of the rest saw price weakness.
Lawrence Yun, NAR chief economist, had positive things to say about this gain. Home sales clearly recovered in the latter part of 2010 and are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies have trended down, he said. A recovery to normalcy requires steady trimming of the inventories.
Total state existing-home sales rose by 15.4 percent in the 4th quarter. The median existing single-family price was $170,600 -- up slightly from the 4th quarter of 2009. Distressed properties, approximately 34 percent of 4th quarter sales, sold at a discount of 10 to 15 percent, a similar trend to what was seen a year earlier.
The NAR believes a housing recovery still rests firmly on a jobs recovery. Yun noted, An improving housing market and job growth will go hand in hand. The housing recovery will mean faster job growth.
This is welcome news in a market where much remains unsure and unstable. The White House missed a recent deadline last week for a decision on what to do with mortgage giants Freddie Mac and Fannie Mae, who are currently under the conservatorship of the Federal Housing Finance Agency.
According to the New York Times, The diminished urgency on both sides reflects the political realities of power-sharing, the fear of doing further damage to housing prices, and a great deal of uncertainty about the best approach to rebuilding the mortgage business.
What is on the horizon for the economy? Federal Reserve Chairman, Ben Bernanke, reported last week to the U.S. House of Representatives' Committee on the Budget, that it was a hard battle last year, as economic growth slowed in the Spring as a result of concerns over inventories, fiscal stimulus and the European debt crisis.
He noted that, The initial phase of the recovery, which occurred in the second half of 2009 and in early 2010, was in large part attributable to the stabilization of the financial system, the effects of expansionary monetary and fiscal policies.
He reports that construction remains weak, though, reflecting an overhang of vacant and foreclosed homes and continued poor fundamentals for most types of commercial real estate. Overall, improving household and business confidence, accommodative monetary policy, and more-supportive financial conditions, including an apparently increasing willingness of banks to lend, seem likely to result in a more rapid pace of economic recovery in 2011 than we saw last year.
We all have our fingers crossed that jobs and housing will recover in 2011, but only time will tell.