The housing industry recovery has been underway for a while now, but for the most part, the upward movement has been moving at a snail’s pace. Experts are in broad agreement that the trend is there -- but the turnaround rate has been tepid. For those of us watching from our Santa Barbara perspective, it’s been a pretty unexciting rebound.
So last week’s good national news on existing home sales was especially welcome, because the report indicated that the 5.9% increase was more than three times greater than economists expected. According to the National Association of Realtors in Washington, the index of pending home resales climbed 5.9% to 101.1. This matches the two-year high reached in March.
“This improvement adds to the recent flow of good news on the housing sector, reinforcing our view that this beleaguered sector is finally on the mend” was what Millan Mulraine, a senior U.S. strategist at TD Securities in New York, wrote to his firm’s clients. Bloomberg News’ 39-economist survey had called for a 1.5% gain in May. Tripling that -- and more -- was wholly unexpected, especially in light of recent reports of weakening consumer sentiment.
Continued low mortgage rates, first-time buyer affordability, and a general sentiment that we have reached the bottom in home sales continue to contribute to the home sales rebound. Additional good news came specifically for developers and builders: a Commerce Department report showed in June that new home sales climbed to 7.6%. New dwellings accounted for almost 7% of the market last year, compared to a high of 15% during the market peak.
So what does such national home sales data mean to home sales here in Santa Barbara? Good news is good news as far as I’m concerned, but real estate – as we all know – is nothing if not local.
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