Recent articles featured in top U.S. publications have suggested the real estate industry is making a come back as the economy improves from the Great Recession. This claim has been solidified with new statistics revealing the largest price increase in seven years, as well as the states with the highest year over year home price appreciation. Nevada reigns as the hottest real estate market with a price increase of 25%. California comes in second as a booming market for sellers with a price increase of 19%. With a 17% price increase, Arizona and Hawaii prove to be hot locations for brokers looking to sell. The real estate market in Oregon is close behind with a price increase of 16%.
An article featured on USA today states the supply of existing homes for sale grew to 5.2 months in April, up from 4.7 months in March. More people believe it is a good time to buy and sell their homes because of the economy's improvements. As a result, more listings are sure to appear on the market from this influx of buyers and sellers. The price increase is especially beneficial to people choosing to sell, largely because they can expect few to no losses due to the all time high year-over-year home prices.
Seasonally adjusted inventory expansion is occurring with a 12% increase and single-family home sales are also on the rise at a 9% higher pace than the year prior. The national median existing-home price is significantly higher than last year, indicating people are willing to pay more for their dream home. Distressed homes seem to be playing a less significant role in real estate sales, proving real estate sales are on an incline.
These numbers illustrate significant improvements in the real estate industry- and most specifically in the 5 states discussed above. However, NAR chief economist Lawrence Yun claims there are constraints preventing a return to the market state before the housing bubble burst after 2005. These constraints include difficulty accessing the necessary credit and a limited number of homes for sale, despite the homes listed being sold at considerably higher prices.
Big data can certainly provide insight to the current state of the improving real estate market; however, an analysis of trends can contribute to an in-depth understanding.
An article featured yesterday in the New York Times attributes the rise in house prices to Wall Street Buyers. Suzanne Mistretta, an analyst at Fitch Ratings mentioned in the article, questions whether the change in prices really reflects market demand or is a result of large investments firms spending billions of dollars buying homes in areas the recession hit hardest.
The gains from these investment companies are greatly contributing to the rising house prices nationwide. However, the article acknowledges some investment companies are increasing presence in areas that still need assistance and leaving the areas that seem to have regained stability. Whether the rise in prices is attributed to small buyers or large investment firms, the numbers indicate significant real estate market improvements.
