Hope you are all doing well.
Today, I'd like to shift gears and try to make sense of the most recent releases of both the New Residential Construction figures for August, along with the NAR Existing Home Sales figures for August. Just as the title asks - "Buy it, Build it, or None of the Above?". Let's see if we can gain a clear response to this question.
Our first stop - New Residential Construction for August. Building Permits were up this past month and over the past 12 months, Housing Starts were down from July and also down from last August, and Housing Completions were down since July, but were up 2.6% from August of 2010.
Our next stop - Existing Home Sales for August. Where do we begin? In sum, Existing Home Sales were up 7.7% from July to August, and more than 18.5% since August of 2010. These figures were released by the National Association of Realtors, or "NAR", and the chief economist for NAR, Lawrence Yun, said that "favorable affordability conditions and rising rents are underlying motivations", despite disruptions from Hurricane Irene, which pounded the Northeast at the end of August and took a toll on the Regional figures for the Northeast. However, despite that major storm, the numbers were promising.
In comments from Ron Phipps, NAR President and broker-president of Phipps Realty in Warwick, R.I., he called the market "remarkably affordable" , but he named some large factors holding home sales back, such as mortgages being denied to creditworthy buyers, and "appraised valuations below the negotiated price." These low appraised valuations are a major contributing factor to contract failures/cancellations, and have increased since July and have soared since last August.
Now, as if you did not already have a sense of the "winner" between New Residential Construction and Existing Home Sales, here are some more key points: Existing Home Sales in the West soared over 18% from July to August, and over the longer-term (since last August), the big winner was the Midwest, with almost a 27% jump in prices. Additionally, the Existing Home Sales release showed that Investors accounted for 22% percent of August Purchases vs. just 18% in July.
The word on the Street is "Buy it". When both "Build it" and "Buy it" are hot, we will be making big tracks in our Recovery. What do you think?
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Have a Great Week, and Happy Rent-to-Owning !
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TAGS: #ResidentialConstruction #ExistingHomeSales #Realtor #NAR #lowappraisal #risingrent