I walked into a South Florida real estate office yesterday and had the opportunity to talk briefly with the office manager. He seemed very upbeat as if business was going well, when I expected the exact opposite from him. After talking to him for a bit, he explained to me that all his business nowadays comes from short sales, REO’s, and foreclosures, and that every buyer that walks through his door is looking for a bargain. That begged me to ask the question, is the housing market starting to turn around? These bargain basement prices must surely be starting to attract buyers.

This week saw the release of data for both new and existing home sales for the month of February. New home sales staged their largest increase in over a year, increasing 4.7% MoM to an annual rate of 337,000. This was primarily due to both median single-family home prices and average single-family home prices being down by record amounts in February. Existing home sales nationwide jumped a seasonally adjusted 5.1% in February, the biggest one-month gain since late 2003. Buying activity was strongest in places such as Southern California and Las Vegas, which have a glut of foreclosures.

In California, existing home sales were up 83% MoM in February as home prices had fallen 40.8% to $247,590 from a year ago.

Even though these are monthly numbers, and home sales and prices are still down on a YoY basis, it is clear that the pace of decline in housing demand is abating. The average 30 year mortgage rate is hovering around 5% and is likely to head lower, making home purchases affordable to many Americans.

If you want even more statistics, though I believe this one is likely to be a statistical anomaly, the Federal Housing Finance Agency in this report, says that home prices, on a seasonally adjusted basis, rose 1.7% from December to January.

There are an increasing number of data points that are indicating that there are signs of life in this nation’s housing market, and I’m looking for a bottom in home prices in the second half of this year. Personally, I’m looking to acquire properties in South Florida because I think they will better withstand a potential devaluation of the US dollar.

Uncategorized california, florida, housing, sales