Real estate sales rebound in 2011, prices nearly flat
NAR forecast anticipates quicker recovery for new homes
By Inman News, Thursday, January 27, 2011.
In its latest real estate and economic forecast, the National Association of Realtors anticipates that sales of existing homes, after falling 4.8 percent in 2010, will rise 7.9 percent this year, to 5.3 million, and another 4.5 percent in 2012, to 5.53 million.
The median price of existing homes, meanwhile, rose 0.3 percent in 2010 after a 12.9 percent drop in 2009, and is expected to rise 0.5 percent this year, to $173,800, and another 2.4 percent in 2012, to $177,900.
Sales of new single-family homes are expected to rebound faster, rising 17.7 percent this year, to 374,000 sales, after a 15.5 percent drop in 2010, and then rising 51.1 percent in 2012, to 565,000 sales. In an earlier forecast, released last month, NAR anticipated that sales of new single-family homes would climb 20.8 percent in 2011 and 30.9 percent in 2012.
The new-home median price rose 2.2 percent in 2010 and is expected to climb 1.8 percent this year, to $224,700, and 1.9 percent in 2012, to $229,000.
NAR expects that 30-year-fixed mortgage rates will average 5.1 percent this year, up from 4.7 percent in 2010, and rise to 5.9 percent in 2012.
The group also forecasts the U.S. unemployment rate to fall from 9.7 percent in 2010 to 9.4 percent this year and 8.7 percent in 2012, while U.S. real gross domestic product is expected to dip from 2.8 percent in 2010 to 2.6 percent this year, rising to 3.2 percent in 2012.
Also today, NAR reported a 2 percent month-to-month rise in December for its index tracking pending sales of existing homes, though the index was down -4.2 percent compared to December 2009.
The Pending Home Sales Index tracks homes for which a sales contract has been signed but the transaction has not yet closed. Typically, a sale is finalized within one to two months of signing, so the index is considered a leading indicator.
Regionally, the index fell 10.7 percent in the West, 5.3 percent in the Northeast and 5.1 percent in the Midwest while rising 1.7 percent in the South in December 2010 compared to December 2009.
And the index dropped 13.2 percent in the West while rising 11.5 percent in the South, 8 percent in the Midwest, and 1.8 percent in the Northeast from November 2010 to December 2010, NAR reported.
Lawrence Yun, NAR's chief economist, said in a statement, "Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."
NAR reported last week that the sales rate for existing homes rose about 12.3 percent from November 2010 to December 2010, but fell 2.9 percent compared to December 2009. The median price of existing homes dropped about 1 percent year-over-year in December, to $168,800.
Sales of new single-family homes were up an estimated 17.5 percent from November 2010 to December 2010 and fell about 7.6 percent year-over-year in December, the U.S. Census Bureau and Housing and Urban Development Department reported Wednesday. The median price rose about 8.5 percent year-over-year in December, to $241,500.