Housing picture shows signs of optimism
Recent real estate news offers a welcome break from years of reports that have ranged from gloomy to lukewarm.
The chief economist for the National Association of Realtors recently predicted that Charleston’s nine months of rising home sales will continue for the next five years.
The Realtors group said last week that July sales of existing home were up 2.3 percent from June and 10.4 percent from a year earlier.
And nationally, home builder’s confidence rose two points in August.
Home builders broke ground on fewer homes in July than June, but applications for building permits grew to their highest level since August 2008.
Those housing market numbers are encouraging, particularly in light of the fact that it has been one of the weakest parts of the economy. And each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
But there is reason to temper optimism with caution. Joshua Shapiro, economist with independent global economic and financial consulting firm MFR, told The Wall Street Journal, “The next few months will be critical in determining to what degree home builders follow their more optimistic talk with action.”
And even improved, the situation is far from recovered from the housing bubble bursting. At the height of the bubble builder confidence ratings were in the high 60s and low 70s. It rose from 35 to 37 this month.
Still, Lawrence Yun’s view of the local real estate situation is worth a little celebration not just in Charleston but also in Berkeley and Dorchester counties, where home sales have been increasing after a five-year decline.
With record-low mortgage interest rates, home ownership is possible for more people — if they can qualify for loans. And the fact that housing starts have been slow to pick up means that existing homes will be in more demand and will draw higher prices.
Home ownership, while only one indicator of the economic recovery, has traditionally been an important one in that it represents an essential part of what many consider the American Dream,
The purchase of a house is the largest financial commitment most people make in their lifetimes. The recent growth in optimism among builders and people in residential real estate is connected to a growth in optimism among potential buyers.
So, yes, there is still that nettlesome issue of entitlements draining the nation’s coffers. The country is still spending more money than it has to fight wars. Unemployment is still high.
But at least for now, we can enjoy knowing that things are looking up a bit in the housing market.