Spring May Not Be In The Air But It’s In Full Bloom In Housing

There may still be buckets of snow out there, but the SPRING HOUSING MARKET seems to be on fire!

Local OPEN HOUSES are seeing lots of activity and subsequent multiple offers — even on houses that have been on the market for some time.

A perceived bottom of the market? Rising interest rates? While both factors probably have some influence on the housing market, I believe there are other equally as important issues at hand.

Sellers may not be getting the prices from 4 or 5 years ago, but on the other end,  for those who are moving up to a bigger house, better school district, etc., there’s a recognition that these homes are more affordable than they once were. So this group is seeing an economic benefit on the other side of the equation.

First time home buyers are entering into the market at viable price points, and those who are downsizing are finding that in some instances, along with lower housing costs come opportunities in the vacation home markets.

The stock market has been posting strong gains and many folks who were laid off during the recession are now reentering the job force.    Manufacturing numbers have steadily increased over the last three months, and the largest segment of the growth in jobs continues to be the service sector.  As the economy continues to rebound we get closer to the ‘virtuous circle‘ where the numbers of people employed continues to increase, they spend money in the market place, and local and national government in turn, see revenues rise in the form of taxes.

“It’s certainly the best time in five years to buy,” according to Karl Case, an economics professor emeritus at Wellesley College, and co-creator of the widely followed S&P/Case-Shiller index, which tracks national and metropolitan home prices.

Boston Globe


Sellers have realized that today’s buyers are very picky and accordingly are making sure that delayed repairs are taken care of, kitchens and baths are updated, paint and carpets are refreshed, wood floors are resealed, and clutter is disposed of.

Buyers on the other hand have to make peace with the fact that the perfect house at the perfect price does not exist.  There will always be trade offs whether it be antiquated kitchens, lack of an expansive yard, outdated bathrooms, older roofs and heating systems, or top dollars for homes with all the bells and whistles, as well as for those located in high profile communities.

The numbers show that the numbers of buyers are increasing as they “take advantage of the most affordable housing market in the last decade, better employment prospects, and growing incomes, to plow forward with housing purchases.”

This much is certain: household balance sheets are much stronger. Americans have earned back much of what they lost in the stock market in recent years. They are starting to spend money on large durable items such as dishwashers and cars. Most major housing markets will finally see job growth this year and incomes are rising again in virtually every big market.

– Builder Magazine

Nation’s Healthiest Housing Markets

According to Builder Magazine, the metro Boston area takes 20th spot:

Boston-Cambridge-Quincy, MA-NH

map

Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area. Principal Cities: Boston, MA; Cambridge, MA; Quincy, MA; Newton, MA; Framingham, MA; Waltham, MA; Peabody, MA. Counties: Norfolk County, Plymouth County, Suffolk County, Middlesex County, Essex County, Rockingham County, Strafford County

Market Health Indicator: 62.6

2011 Building Permit Forecast: 8.469

Percent Change in Building Permits: 32%

More people would no doubt move to Boston if the housing wasn’t so expensive and the winters so harsh. They would find that the unemployment rate, 6.75%, is well below the national average, even as the metro area continues to add jobs. Plus, those jobs are well-paying. The median income here is $75,669.

It needs to be because housing is expensive, though prices are falling. The median price of a home, which got as high as $410,750 in 2005, fell to $344,540 last year, and economists at Moody’s economy.com predict it will drop another 6% this year. Boston’s meager household growth–the smallest on our top 20 list–won’t help matters. But at least the area continues to add families, unlike many other big Northern cities.

Price declines, though, aren’t expected to stop builders from pulling more permits. Building permit activity rose 17% last year, thanks to a big jump in multifamily permitting late in the year, and Moody’s predicts a gain of another third this year, with a huge increase forecasted for 2012 that would take the area back nearly to 2006 levels.

Market Hotness

1.4

12 mos. permits per 1,000 residents

Period ending Dec ’10

Job Growth

1.3%

Annual rate last 4 quarters

Period ending Dec ’10

Res. Permits

18%

YTD change vs. prior year

Period ending Dec ’10

*courtesy Builder Magazine

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2 Responses

  1. […] Meanwhile, another realtor in town assures us that the “SPRING HOUSING MARKET seems to be on fire!” […]

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