Anyone that is familiar with the housing market understands that real estate purchases are seasonal. Spring and summer will see the home sales during the year, followed by a slowdown in fall due to the holidays, and a drop off in winter due to weather.
This year, however, has seen an increase in home sales in January and February when compared to the same figures from last year. In fact, figures for January and February of 2012 are up 8.8% compared to 2011, for preexisting home sales.
In January, figures for preexisting home sales registered at an annual rate of 4.63 million. February sales were a little less at 4.59 million. While an annual rate of 6 million homes is considered to be a healthy market, this rate at this point in the selling year is giving much hope that the market is in recovery mode.
Figures for new home sales for February were also released at this same time. The annual rate of 313,000 units is seasonally adjusted in February. This is a decrease of 1.6% from January’s figures. However, this should not be taken as too much bad news; these figures are up nearly 12% from the same month in 2011.
The Federal Housing Finance Committee released its figures for housing prices in January of 2012. The data shows that January home prices were flat. While this is not the best of news, it should be seen in a positive manner. This is the first time in a long period that home values have not dropped.
While this data is not proof-positive that the housing industry is returning to a booming industry, it is proof that life is coming back into the market. Even if the facts and figures only show a little bit of improvement, this improvement is better than a decline.
Many believe that 2012 will continue to be a mixed year for the housing industry. It is anticipated that home values may continue to drop during the year, but this is not written in stone. Election years have a way of slowing down the market, even during a good period, and this election year will not be any different.
Home inventory levels have shown a significant decrease so far this year. Inventory levels are down 22% from the same period in 2011. However, there is a large backlog of foreclosures that are pending in the shadows, and a gluttony of distressed properties may once again cause prices to drop.
The real estate market will most likely endure another year of good and bad news. This is, in fact, a good sign for the recovering market. There was a long period over the last few years when the only news that came out about real estate was bad.
Many real estate experts disagree about how 2012 will turn out for the industry. Some say that full recovery will be seen by summer, while others believe that March data will show a decline due to the high figures in February, signaling another stagnant year. Only time will tell which opinion is right.