Real Estate Outlook: Sales Jump

The economic recovery continues to bump along in a "fits and starts" pattern, but what's important to keep in mind is that the core trendline remains positive.

Take the latest housing numbers released last week. New home sales, which had been anemic following the expiration of the tax credit deadlines, bounced back with vigor in June, according to the Commerce Department.
Single family sales jumped by 24 percent seasonally-adjusted basis over May, and were 19 percent above the totals for June 2009.
The sales rebound verged on spectacular in the Northeast region -- up 46 percent over the prior month. Gains were 33 percent in the South, and 21 percent in the Midwest.
Only the Western states saw a drop in new sales, and that was by 7 percent.
Bob Jones, chairman of the National Association of Home Builders, called the latest sales figures "an encouraging sign" that housing activity is springing back from the expected deep lows experienced after the credits expired.
Prices of all homes -- existing and new -- also continue on a path of modest recovery, according to the latest Standard & Poor's Case-Shiller index. The widely-watched report on values in 20 major markets found gains in all but one area -- Las Vegas, where distressed sales transactions dominate real estate activity.
On a national average basis, home prices were 1.3 percent higher compared with the month before, but they gained 4.6 percent year-over-year.
Three metropolitan markets tracked by Case-Shiller recorded year-over-year price increases in double digits: Minneapolis and San Diego, up by 12 percent, and San Francisco by 18 percent.
Other markets also saw noteworthy annualized gains: Los Angeles prices were up by nearly 10 percent, Phoenix and Washington DC by 7 percent, and Boston by 5 percent.
Still another positive sign: mortgage applications to buy houses continue to increase, after weeks of being down. The Mortgage Bankers Association reported a 2 percent jump in purchase applications last week - even while refinancing applications dropped 4 percent despite record low mortgage rates.
On the sobering side of the fits and starts pattern, we saw consumer confidence decline by four points in the latest month, according to the Conference Board - in large part because of continuing worries about unemployment.
And the Federal Reserve's monthly "beige book" survey of economic conditions around the country offered only mild optimism about how fast employment is likely to expand.
Though the Fed found gradual improvement in jobs in several large market areas, including New York and Chicago,lit still does not forecast any upside employment breakouts in store nationwide.
Slow and modest are more likely.