Real Estate Market Update - June 2013

CONFIDENCE

is the buzzword in housing this week:

Home prices could grow as high as 7.2% this year, according to JP Morgan's new report. Analysts there revised 2013 predictions higher -- as well as projections for 2014 and 2015, with an expected 3.9% and 3.2% growth, respectively. All cash sales remain higher than 30% of housing sales, indicating that investor demand is still strong, fueling higher prices in the lower tiered properties in most major metropolitan areas.

Fannie Mae’s recent monthly housing survey showed Americans’ confidence in their ability to buy and sell a home rose sharply in May. The share of respondents who say now is a good time to sell a home climbed to a record high of 40%, compared to 30% in April and 16% a year ago. The share of respondents who say it’s a good time to buy a home also increased, moving up 5 percentage points from April to a survey high of 76%. Americans are more confident in home prices, with the average 12-month expectation increasing 3.9%, compared to 2.7% in April.

Confidence may not seem like a hard indicator for housing, but plays an important role in every real estate transaction. That confidence can mean the difference between making a move and sitting still. It can move the market needle in either direction. The strong gains in confidence in housing going into summer are a significant indicator of where we'll end up this year. The gains in sales and prices are going to far exceed previous expectations.

(courtesy of Marty Rueter, President Weichert Real Estate Affiliates)