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2012 Home Sales: Positives on Many Fronts

NAR released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus.

NAR Chief Economist Lawrence Yun is upbeat about 2012 because in a number of areas indicators are pointing upward. Not only are home sales up but housing starts are up and home prices are stabilizing in many markets and heading up in some. In areas where they’re still down, the declines aren’t that great. More fundamentally, broader U.S. economic signs are looking positive, including the all-important jobs picture. About 100,000 job are being created a month, and that could rise to 150,000—still not a quick enough pace to get us back to where we were before the downturn but the headwinds are in the right direction.

In the video, Yun talks about what the latest figures mean.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

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  1. The High end condominium market in South florida has been strong and getting stronger. Alot of foreigners are able to appreciate the low prices and have been purchasing a large number of 2nd homes in south florida. We are seeing talk of new buildings being constructed and presales and reservations are up as high as 70% on some of these buildings in the Finanacial district of the city of Miami.

  2. Home sales in the D/FW market is great!!

  3. This is a match for what we are seeing here in Bend, Oregon as well. Inventory is down, home sales are up, and more buyers continue to enter the market on a daily basis. Multiple offers are commonplace now, and the local Bend Real Estate market is experiencing an unusual amount of sales for the winter months. The positive signs of a rebound are evident, and continue to pick up steam. Visit http://www.BendRealEstate.com to view homes in Bend Oregon, or visit http://Twitter.com/BendOregonHomes to follow my tweets on the local Bend Oregon Real Estate market.

  4. Rick Dale

    Get real Yun, our Real Estate has tanked! And foreigners buying??? How about AMERICAN familys buying?!?! We need somebody in the WH who’s going to create US jobs so they will have an income to buy the AMERICAN dream, a home! You can put all the icing you want on a pile of crap, it’s still a pile of crap. US private sector jobs is the answer!
    Will NAR allow this post, we’ll see.

  5. Read between the lines

    Remember when The National Association of Realtors says it overstated about 3.5 million home sales during and after the Great Recession, a revelation that shows the housing market remains much weaker than previously thought. .

  6. It’s about time see a major turn around!

  7. I couldn’t agree with this article more…This is exactly what we are seeing in the field here in Boise, Idaho and are local reporters haven’t caught on.

  8. Mike Kelcher

    I’m in Minnesota. Inventory levels are lower than in recent years. The low inventory might be more due to seller apathy and attitude toward a poor market than anything else. Normally a lower supply would cause prices to rise, but the number of qualified buyers is extremely low. Prices continue to drop due to little buyer interest.

    Where I disagree with Mr. Yun, is that one cannot look at the job market and say there are 100,000 new jobs created each month without also taking a look at how many of those are temporary, how many are part-time and most importantly…how many people are losing their jobs.

    So, I agree with Rick Dale when he says, “Get real Yun, our Real Estate has tanked! And foreigners buying??? How about AMERICAN familys buying?!?! We need somebody in the WH who’s going to create US jobs so they will have an income to buy the AMERICAN dream, a home! You can put all the icing you want on a pile of crap, it’s still a pile of crap. US private sector jobs is the answer!”

    I don’t know who I’m going to vote for in the upcoming election, but I know who I’m voting AGAINST!

  9. Here in Honolulu are inventory is remaining at 5 months and single family homes and condos are being bought just a few days on the market. We are seeing alot of demand for buyers especially in the first time homebuyer sector. Hotel occupancy is also up here in Honolulu and are high end market had to record sales one at $22,000,000 & $17,000,000, which is a sign international buyers are back an investing strong in our Hawaii market.

  10. We are seeing a similar strengthening in the real estate market in Bergen County, New Jersey. For example, based on an analysis of home sales in Ridgewood, New Jersey, during the past six month, there is currently only 3.6 month’s inventory of single family homes for sale in Ridgewood.

  11. Dr Lawrence Yun, As an economist I would hope you know that figures lie and liars figure. Most statistics are a snap shot of a precisely selected set of data. I think your data is skewed by wishful optimism. Our housing market will regain its vigor when the 8.6% to 17% (depend on which set of data you use) of unemployed, under employed, and those who have left the job market obtain a job.

    The low inventory is not a sign of success but of lenders not foreclosing on home owners who have not paid for 1 to 2 years and lenders keeping that “shadow inventory” behind the scenes. This a great strategy to keep the home prices as high as possible so investors will not get slaughtered on short sales.

    This is the best time in my life to buy real estate but the worst time to sell. My opinion is that the market will start recovering in 2013, after Mr. Obama wins and those with money will know how to react to the compete socialization of America or Mr. Obama is deposed and freer market is allowed to grow.

  12. By simply counting pendings, NAR demonstrates a real lack of market savvy.

    It’s true that some markets are recovering because they were not as devastated in the first place.

    But in devastated markets, pendings INCLUDE SIGNIFICANT NUMBERS OF SHORT SALES. As an example, in Sonoma County CA, short sales are 22% of the solds for 2011. In pendings, short sales are 60%!! NAR somehow doesn’t seem to understand they need to SUBTRACT 38% of these pending sales to develop a more accurate prediction of future sales at least for this area. (I’ve told them before to do this…)

    And it’s in these very devastated markets that US citizens will continue to lose out to foreign cash. We must rescue these badly hit areas.

    Please check out my http://www.occupy-our-homes.info site. I’m in negotiations with Wells Fargo to develop a solution that will stop these massive foreclosures and short sales. Nationwide there are 6M defaulted loans in the pipeline and 11M loans underwater out of 50M loans. We need to stop giving away our real estate to others while locking out our citizens from ownership. Any support is welcome.

  13. Matt

    @Rick Dale: Yun is using “re-benchmarked” numbers. How could us silly Realtors®, out in the field, have a clue about the market.

    Remember to re-benchmark your $40 forced PAC contribution, too.

    Also let the NAR executives we really should be advertising on NBC/Universal programming, like “The Today Show” and NBC “Nightly News.” That’s right folks, NAR advertising misses more than one third of the viewers during those times. We purposely don’t advertise when Barbara Corcoran speaks on The Today Show about great houses across the country. Brilliant, ‘eh?

  14. TAMMY STARR

    It is because the election year is coming and people are living finally on hope and prayer again which is a good thing because it restores faith. It seemed most had given up hoping and praying. Maybe 2012/2013, America will rise again!! Praise God for the American Dream!!

  15. Robert Freedman

    This responds to C.J. Holmes’ thoughtful remark about subtracting out a percentage of pending sales to increase the accuracy of the number. Our researchers say there has in fact been a widening gap between pending sales and actual sales a month down the road. Being able to see that gap widening is valuable, because it makes it possible to quantify the impact of lenders’ tight lending requirements, continuing appraisal problems, and so on. Without the index, you would have to rely mainly on anecdotes to see that. That said, the pending sales index is only intended to provide a broad picture of market direction, and the analysts who watch the figure do so with the understanding that it’s a leading indicator of trends and not a precise snapshot in time. Thanks for your important point.

  16. We are seeing similar trends in Greenville, SC and the Upstate of South Carolina. 2011 was strong and 2012 is starting off even stronger.

  17. Peter Bachman

    And exactly how will Obama being out of the White House turn things around? He doesn’t make the bills, Congress does.

  18. Rick Dale

    Matt, they try to sugar coat our crappy numbers. I just pulled up Boise R.E. above, if things are soooo good why are 14 of their 27 New listings forclosures/short sales? Over half, 50% lost it all??? They got the shaft, the other half of their listings, the sellers are probably upside down. If homes are such great deal right now, why isn’t everybody BUYING, more so us RE folks to flip???? You can’t get money, the banks arn’t lending the moneeeeeeey! Got cash? comon!!!! Need a loan, oh, sorrrrrrry, your 710 just dosen’t qualify right now. Believe that, last week had a 710 with a good job that didn’t qualify. We need US private sector jobs!!!! Quit spending our tax money and loosen up on the private sector job market. What dose the WH not understand, JOBS=SALES. We’ve run out of other peoples money!

  19. After our entire financial system was at the brink and five years of down and sideways movement, consumers and industry professionals are accepting the fact that this is the “new normal”. Optimism creates opportunities and growth and that is the beginning of a positive trend in our country and our industry.

  20. Southern York County Maine has been experiencing increase levels of sales and we appear to be leveling off in price. We have not experienced the impact other parts of the country have from Short Sales and REO’s.

  21. Diane C. Williams

    R, Dale, How quickly we forget! When we had the “free market” the sharks positioned themselves!! Now the majority of home sales that are happening are for cash only. Foreign buyers have cash. Until we get our American banks to start lending and investing in our young people again, America is on sale to anyone who has the cash! Those of us who have been in Real Estate for over 20 years remember in the 80′s, we got a cash influx by way of the Japanese buyers who eventually lost their shirts and sold it back to us at their loss. This time the loss down the road will be The American Dream of Home Ownership. Our current President was not a player in the initial setting up our current financial situation. Any President would be in a similar situation. Jobs!! Until our huge corporations/banks etc. stop outsourcing jobs to other countries and start lending to our citizens, we will become a Nation of Renters, where we are Human Capital generating higher dividends by way of rents for the investor owners then the interest made in their stock market portfolios. The largest REO/Asset servicing company in the Nation has 60 years experience in Debt Collection and 85% of their staff are cubicle, telemarketers outside the US of A making under a $1.00 an hour. Modification, Short Selling and working to create solutions in our housing market is not their expertise. As a nation we need to clear up our own personal financial acts and refuse to be hog tied by debt and debt collectors. Forbes end of year list of Billionaires has a new crop of Hedge Fund created Billionaires, who positioned themselves well!! The saying has always been, “Follow the money”. Today, following the money lost, as well as the money found is necessary!

  22. Diane C. Williams

    Happy New Year! I like Hawaii’s outlook. The Hawaii Real Estate Market has always been the last to fall and the first to recoup.

  23. Interest rates are low and buyers are out buying. In the New York suburban market of Westchester and Putnam County there are many buyers out buying. This is at a time of year that is traditionally slow. A few posted that these current pending numbers include short sales. Not in our market. A listing isn’t reported as pending until all contingencies are met and it is ready to close. There were close to 1,000 contract signed, pending sales and closed sales since the first of December in our MLS. This includes over 400 closed transactions with 10 of them being under $100k and more then 40 of them selling for over $1m. It really covers the whole market. At least in our area it looks like we’re in for a busy year.
    Don
    http://www.nyhomeseller.com

  24. Rick Dale

    D. Williams, the problem is I didn’t forget. I started pounding nails as a teenager in ’71/72′, went in the Navy in ’76′, got my RE license in ’80′, opened my brokerage in ’91′, opened my construction company in ’96′ and closed my RE company last month due to lack of sales. I saw Carter/Congress in the late ’70′s’ MAKE the banks start to loosen up their lending rules and the birth of sub-prime loans began. (you know, the banks had rules and certain qualifying numbers people had to have to get a loan, that’s why they were successful, they lent to people who could pay it back, imagine that!) The first rung of block was laid for the giant pyramid too be! Regan/Bush One rode the growth of a new group of buyers for 12 years, adding more rungs of block. Clinton added his blocks along with Congress (the main culprit!, they have the real control in the banking matters) and Bush Two added his blocks. The cap block, which Congress and the banks SAW coming, was Congress FORCING the banks to make extremely low sub-primes [or we won’t give you FDIC and other guarantees ;) ] and put the banks between a rock and a hard place. The banks had rules and our government MADE them change, only because our government knows what best for us. The banks are to blame too as they saw $$$. The banks have always been greedy, my great and grand parents knew that, they paid cash. If they didn’t have the cash, they didn’t get it. They were never a slave to a bank. But our government, knowing we Americans want everything now, pay later and Washington being greedy for VOTES, made the banks give us easy money knowing most couldn’t pay it back. Then our legislature branch has the gall to blame the banks and then puts the foxes (Dodd/Frank [who passed bills forcing the banks to lend sub-primes]) to guard the hen house. It all stinks and it sunk us all like the Titanic. So Ms. Williams, I have NOT forgot. I’ve been there done that.
    The only thing that’s going to fix our country is private sector US jobs.The few house cleaning and gardening jobs created by the foreigners buying homes right now are few and far between. To get 15 to 25 MILLION Americans buying homes we have to get someone in the White House that will loosen up the regulations (EPA etc….), drop corporate taxes to get companies to come back to America, allow private sector companies lower cost per employee to start hiring more Americans and get America kick started again. No more Government jobs, they don’t make money or make a profit, they cost you and me (taxpayer) money. PRIVATE SECTOR JOBS, it’s what America is. When Americans have jobs, they buy houses. A 1/10% or 1/5%, that’s one tenth or one fifth of ONE PERCENT increase in sales, are you kidding, that’s nothing to be doing back flips over. Those numbers really suck. Get someone in the White House that will create jobs and we will start selling houses to Americans again. A socialist run government, of the government, by the government, dosen’t work in our successful capitalist system. We’ve run out of other peoples money. Vote in 2012. Stand up for yourself and speak, what says you? Anybody?

  25. I agree that activity is up in southwest Florida. I always have a bit of heartburn when the pending numbers are used so show how strong the makret is in the <a href="http://www.sarasotaone.com/sarasota-county-homes/&quot; Sarasota Real Estate market. I find the largest number of pendings are usually short sales. The usually account for about 60% of the under contract listings. the dissapointment is that they only represent about 20% of the closings. I did a snapshot back in November that seems to hold fairly steady.

    http://www.sarasotaone.com/blog/sarasota-short-sales-and-foreclosure-statistics-november-2011/

    <a href="http://www.sarasotaone.com/blog/category/market-updates/&quot; Several markets like Siesta Key and Longboat Key are showing more sales but prices seem to be steady of off a bit. I arrive at this by not only tracking the average sale price but put more weight on price per sqaure foot.

    Foreclosure filings are off from last year as well and I suspect the slight uptick during the last quarter has more to do with statute of limitation issues of filing a foreclosure than the media hype around the banks “clearing up” the paper work mess form the end of 2010.

  26. Anne Arundel county has been experiencing increased REO sales along with the rest of the nation. Also experiencing the price shift.

  27. In Vancouver WA pending home sales saw a spike mid-year as the RMLS reminded short sale listing agents to mark their properties as pending if an offer was accepted and only that offer would be sent to the bank. This caused a several-hundred home surge in pending sales as 80% of the listing agents complied. Now the
    homes for sale Vancouver WA
    Resale inventory level is at 4.8 months.

  28. I love reading the information provided in your articles. After nearly 25 years in the real estate business I have seen many changes from market trending highs and lows, to high interest rates, and terrible loan practice’s across the board.. Everyone is making less then they wanted including the real estate professionals paying higher advertising cost and MLS fees every year, gas prices, they are right in the throw of it with all the struggling population. Many agents at times are being asked to reduce their fees to put a deal together. We already got less, because sellers are getting less……It is not your agents fault, it really is not. I feel there are two “main” real reasons that real estate is now moving again:
    My take on the market today:
    #1.Sellers after 3-5 years, are coming to terms with the fact that they are not going to get the price they once could have during the boom……. for their properties. (they missed that boat). Many buyers continued to look and get a feel for the markets they were interested in…which in the long run really helped them make a intelligent pricing/offer decision when they found what they were looking for.
    #2. Interest rates are at all time lows and many buyers that were on the picket fence, has decided that owning a home is the American way and NOW is a great time to jump in.
    I know real estate will recover…this was a “man made crisis” and they take a little longer to recover. Hang in there, owning a home is the best thing you can do for a family and your future. The other way is throwing money away. You all need a place to live so why not own it. Best to all the read this and have a wonderful day!

  29. This article marked the start of another housing boom in Bend Real Estate that has continued to this day! However, there are some indications the market is softening.

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