Is the Sleeping Giant–Residential Home Sales–Ready to Awaken?

Since 2007, residential real estate sales have suffered as never before in history. After the loss of much of the manufacturing functions to overseas entities, the single foundation of the U.S. economy, real estate, has been mired in malaise. However, at long last, there are signals that this sleeping giant of prosperity is finally awakening.

In many U.S. markets, Washington ┬áD.C. Real Estate-metro area included, real estate finally “bottomed out”; Home Buyers, sellers and real estate professionals are witnessing a rise in sales, prices, along with a stabilization or decline in foreclosures and short sales.

Residential Homes Sales

Although the “bottom” was lower and more troubling than most expected, there is growing excitement that the real estate market, particularly in residential home sales, is turning the corner. Even formerly negative industry analysts believe the improving employment situation and the foreclosure decline are creating an environment wherein residential home sales, stagnant for so long, might rebound strongly in 2012.

As further proof of this awakening, the National Association of Home Builders (NAHB) recently stated, “The Washington, D.C., area is not only ripe for recovery, they need to start building units.” A potential strong market rebound still has its detractors, however.

Citing the under-performing U.S. economy, the large number of distressed properties still available and the growing European debt crisis, some analysts remain unconvinced of a real estate resurgence. However, even these naysayers admit that positive signs of a rebound are present.

Conditions for a home sales recovery are improving. Residential rents have increased (making it wise to consider buying), for sale inventory is the lowest in 5 years, home affordability is at record highs, mortgage delinquencies have apparently peaked, new employment is increasing, and consumer confidence seems to be returning.

Two other factors are more difficult to measure, but may contribute mightily to awakening the residential home sleeping giant. Americans are suffering “bad news fatigue”, tired of hearing a constant deluge of negative information. Many people appear to want to become part of the solution and no longer passive victims of economic doldrums.

The Demand for New Homes is Rising

The Demand for New Homes is Rising

Second, there is enormous pent up demand for new homes. Typically, when the market turns the corner, this stifled demand explodes into the real estate market. Although the recent recession was the deepest down economy since the depression of the early 20th century, people still work, marry, have children, and keep their dreams of home ownership. Unable to fulfill these dreams in recent years, many are ready to take advantage of low mortgage rates and affordable home prices to buy the properties they have desired for so long.

The sleeping real estate giant is awakening. Be ready to take advantage of the coming rebound.

7 years ago by in Real Estate Trends | You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.
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