Home Sales Increase Dramatically in April
Maybe you have noticed that there has been a dramatic change in the real estate market in the past month. If you haven’t, what’s going on is that home affordability is now at record levels and the housing market is undergoing what can only be described as a surge.
Home Sales Increased in April 2012
According to the National Association of Realtors, home sales hit 4.62 million homes during the month of April. This particular figure represents an increase of 3.4% compared with March and up 10% from April 2011.
Good news for people watching the real estate market across the nation, this improvement in home sales was not limited to one particular region. In fact, this general improvement occurred in all four regions of the United States, which is considered to be a positive indication of a sustainable recovery, and proof it might not be just another temporary short-term gain.
Fewer Sales of Distressed Properties Helped Lead to the Gain
Distressed property sales, meaning homes either in default or already repossessed by lenders, declined during the month of April. This decline helped boost home prices because sales of these distressed properties generally sell at steep discounts to conventional sales and because of those discounts, usually can drag down the overall median sale price.
The National Association of Realtors also reported that the median price of home sales sold during the month of April was $177,400. This particular price point represents an increase of 10% in comparison to a year ago.
The percentage of distressed property sales went from 37% a year ago in April 2011, to 28% of sales, this April.
Home Sales are Also Being Helped by Normal Home Buying
It isn’t just investors who are getting back into the real estate market. As April really is the start of spring, and the selling season, many homeowners are being encouraged to try to capitalize on this spring selling season and this home sale price stabilization by putting their home on the market.
Inventory of homes for sale rose 9.5% to 2.54 million homes in April 2012, a fairly common occurrence that is partially due to the spring selling season. Compared to the supply of homes for sale a year ago, the current supply of homes for sale represents a drop of 20%. It is also a significant drop from the record high number of homes for sale from July 2007, which was over 4.04 million homes.
A Slow and Sustainable Recovery
While it might be a slow process, the real estate market is undergoing what appears to be a sustainable economic recovery.
The key issue in the real estate market is credit, which still may not loosen up any time soon and is therefore still tight for both home builders and mortgage borrowers.
However, home financing is now easier for home buyers due to the fact that interests rates are at an all time low.
It is definitely still a good idea to watch what happens in the real estate market during the spring selling season in order to determine whether or not this is a long-term sustainable recovery.