Stan Humphries, chief economist at Zillow, Inc, discusses housing market increase with Bloomberg Television’s “InBusiness With Margaret Brennan.” US Existing home sales increased 4.3% to 4.57M, the highest level in 20 months. These numbers were better than expected and now show 3 of the past 4 month with upticks in sales.
“It’s been a crisis of confidence, and we see that thawing as the job market continues to improve”, says Humphries, contributing much of the growth to increase to consumer confidence and lowering unemployment rates.
Still, as high as 20% of sales transactions can be attributed to foreclosures, and potentially another 15-20% in distressed properties, like short sales. Sale prices declined 4.7% in 2011 and are expected to fall another 3.7% in 2012. There is hope, however. Humphries says that we expect to see the bottom of the market in 2012 and in some areas, like LA, Riverside and Pheonix, prices may actually begin slowing increasing. Other markets like Tampa, San Diego and San Fransico will likely decline through the year, but pick up by year end. “This will cause some confusion in parts of the market for consumers.”
Economic improvements are signaling to consumers that the market is more positive pushing them off the fence to buy. Spring sales across both existing home sales and new home sales are expected to show improvements.