Housing Recovery Turnaround
The latest real estate news is good for both the U.S. and worldwide economies. After years of being in a slump, the latest reports show that real estate prices are increasing and inventory is decreasing.
A boost in the real estate market has a trickle down effect on the economy. When people purchase new homes, spending increases and more people are employed in the real estate, mortgage and homebuilding industries. This also has a positive impact on manufacturers and designers of furniture, carpets and appliances, as well as landscaping companies and nurseries.
Experts predict that the housing market will increase the Gross Domestic Product (GDP) by 0.6-percent this year and as much as 1-percent next year. This marks the second increase in the real estate market since 2005.
Last year, only 4.65 million existing homes were sold. This year, experts are predicting this number will increase to approximately 5 million, which is an overall increase of 7.5-percent.
Nationwide, the median home price is nearly 5-percent higher, with 2014 expected to see a 7-percent gain. Areas around the U.S. that are experiencing higher job growth, such as Texas, North Dakota and Colorado, will see a higher increase in home sales, with home values continuing to increase.
Areas that once had staggering inventories of unsold homes are seeing a decrease in these inventories. From Sacramento to San Diego, some inventories have decreased by as much as 65-percent in a mere 12 months. Even if areas that were not considered overly built, such as Boston and Washington D.C., inventories have reduced by 20- to 30-percent. And Phoenix, once experiencing the overwhelming plight of foreclosures, has seen inventories decrease by 15-percent.
Nationwide, home inventory has decreased to 4.2 months’ supply, the lowest since April 2005. Other cities that are anticipated to benefit from the real estate market’s surge includes: Portland, Oregon; Seattle, Washington; Austin, Texas; Salt Lake City, Utah; Atlanta, Georgia; Minneapolis, Minnesota; and Boise, Idaho. In some of these areas, sellers are receiving multiple competing bids and many builders can’t keep up with demand.
With a plentiful overstock of homes in Nevada and Florida, these markets are expected to see a slower recovery. Additionally, New Jersey, Connecticut and New York City will also require several years to recoup their real estate losses.
Better Than Loans is a hard money lender that focuses on providing bridge loans, apartment building loans and commercial building loans to builders and investors. As a direct lender, they offer fast loan funding.