Hike In Home Sales Gives Americans Hope for Recovery

by / Thursday, 16 May 2013 / Published in Real Estate, Uncategorized

The number of existing homes for sale increased 9.6% in February 2013 to their highest level since November 2009. This is welcome news not only for both homeowners and potential buyers, but for the country as a whole. It indicates a trend towards ongoing recovery in the housing market, relief for homeowners, and a potential increase in work for some sectors. Rising home sales suggest a potential increase in money moving through the economy in the form of jobs, credit availability and new construction, and may encourage more spending across the board.

February 2013 was the 20th consecutive month showing an uptick in yearly sales, as well as the 12th consecutive month of price increases. This suggests that the housing market is on its way to a recovery. It also indicates that Americans are feeling increasingly optimistic that a recovery is imminent. After years of news stories about families who suddenly found themselves homeless and young couples that no longer felt the goal of home ownership was within grasp, these numbers may help many to see light at the end of the tunnel. Interest rates dropped dramatically as the real estate market crashed, and credit tightened, making it even more difficult for those looking to buy. Interest rates are creeping back up, however, and as confidence increases, regulations on lending may begin to loosen as well, giving more Americans a chance to become homeowners. February’s home sales also point towards an increase in available homes on the market, helping to ease the inventory shortfall which has also constricted recovery.

In recent years, the supply of homes for sale has been limited as homeowners found themselves paralyzed by a dramatic drop in the value of their real estate. February showed a rise in the average price of homes of 11.6% from one year previous. With this increase in home sales and prices, sellers can feel more confident about placing their homes on the market and receiving a reasonable return from the sale. This easing in the supply shortfall will likely benefit both buyers and sellers. The restricted availability of homes for sale has led to bidding wars, and many times, buyers are so limited in their selection that they are unable to find what they’re looking for. Investors have also increased their real estate purchasing, helping to keep sales up, even during traditionally slow periods like Christmas.

This increasing demand could lead to more work and more jobs in the construction field, as well as related areas, as new home construction picks up speed. The confidence to buy appears to be returning and, as it does, more jobs are likely to follow. Construction workers, plumbers and electricians, amongst others, may see more work available. Builders have started more new housing construction in February 2013 than at any point in the previous four and a half years. Additional home construction could lead to additional retail and food services moving into an area, creating even more jobs. And as people find more work, they may very well be looking to purchase a home themselves.

The numbers released in February give many in the country reason to be hopeful. These statistics affect far more of the population than just those directly involved in the housing market. Just as the devaluation of homes and decrease in purchasing affected all aspects of the economy, a recovery in real estate could provide a jump board for widespread economic improvement. Increased home sales indicate improving confidence and thus, more money working its way through the economy. Just as importantly, for many, it provides a reason to be hopeful, and offers supporting evidence that there is an end in sight, giving those who have been barely hanging in there a reason to continue hanging on.

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