MyBankTracker.com wrote an interesting article on the housing market’s growth in some cities. They pointed to the increasingly important real estate tenet of location, affordability and a community’s ability to weather the economic downturn. The article referenced RelocateAmerica’s Top 10o Places to Live and also addressed San Francisco’s Chronicles excellent review of eight ways to measure the housing market’s strength and associated recent statistics. Their content is bullet pointed below:
* Pending Home Sales — Positive: Up 8.2% in February. Pending Home Sales are the houses in the process of being sold.
* Housing Starts — Negative: Down 5.9% in February. Housing Starts are new residential projects.
* New Home Sales — Negative: Record low 308,000. New Home Sales are sales of newly built homes.
* Existing Home Sales — Positive: Up by 0.3 million in the past year. Existing Home Sales are sales of already built homes.
* Home Inventory — Negative: About 9 months supply of homes, worst since Aug. 2009. Home Inventory is the number of homes for sale.
* Housing Affordability — Positive: Mortgages rates remain low, as an average family would spend 14.2% of its income on its mortgage, well below the usual 25% max.
* Mortgage Applications — Negative: Down 9.6% in February. The number of mortgage applications is an indicator of how many people are buying homes.
* Mortgage Rates — Positive: Down to 5.17%. Low rates encourage purchases of new homes.
* Real Estate Mutual Funds — Positive: Up 105.3% in the past year. Rising returns show greater investor confidence.
The conclusion is a mixed bag and here are few points to consider. Pending home sales is one of the strongest indicators of the health of housing market and economy. The slant is probably heavily influenced by the homebuyer tax credit and we’ll see better clarity on this trend after April 30. It shouldn’t be surprising that housing starts and new home sales are down, especially considering inventory levels and movement in existing homes. We need to flush the existing inventory prior to simply adding to it with something new. For buyers and people looking to relocate, home inventory, affordability and mortgage rates are very positive signs. It is a buyer’s market. As MyBanktTracker.com notes “The good news is, the real estate market has pulled out of its freefall, and there are places — such as Huntsville, Ala. — that are worth relocating to.”