Closing in on Recovery

The national housing data this past week from the Census and NAR was a bit of a wet blanket on what was thought to be an improving market. With the exception of price increases in both the new and existing home markets and a rise in building permit activity, housing data released this last week was generally negative. In February, we saw home sales in both the new and existing home markets decline while residential construction activity fell due to a sharp drop in single-family activity. However, these figures do rely on some amount of sampling and seasonal adjustment that has the potential to provide false direction. Our data feature this week, courtesy of Housing IntelligencePro, examines the pace of actual, closed new home transactions in January and February. Based upon data we’ve received so far, the first two months of 2012 look to be outperforming in terms of volume compared to 2011, and even though March isn’t even over yet, the initial stream of transactions looks positive as well. The year-over-year trend has been consistently improving and despite some of the short-term hiccups, we expect new home volumes to continue to stabilize and maintain a year-over-year improvement. The median price of a closed new home has also remained fairly flat over the last year, further suggesting a floor in both price and volume has solidified. While we won’t see explosive improvement from here, we are optimistic about incremental sustainable gains going forward.

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