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National And State Economic Update

Real estate dominated last week’s economic headlines, with March’s existing home sales and housing inventory down, but prices stabilizing, according to the National Association of REALTORS®. Total sales of existing single-family homes, townhomes, condominiums and co-ops declined 2.6 percent to an annual rate of 4.48 million in March from an upwardly revised 4.60 million in February, but were 5.2 percent above the 4.26 million-unit pace in March 2011.

“The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” NAR chief economist Lawrence Yun said. “Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”

Total housing inventory at the end of March declined 1.3 percent to 2.37 million existing homes available for sale, which represented a 6.3-month supply at the current sales pace. March’s listed inventory was 21.8 percent below a year ago and well below the record of 4.04 million in July 2007.

The national median existing-home price for all housing types was $163,800 in March, up 2.5 percent from March 2011. Distressed homes — such as foreclosures and short sales sold at deep discounts — accounted for 29 percent of March’s sales (18 percent were foreclosures and 11 percent were short sales), compared with 34 percent in February and 40 percent in March 2011.

Looking at new real estate activity, construction permits issued in March for privately owned housing units were at an annual rate of 747,000, according to last week’s report from the Census Bureau. This was 4.5 percent over February’s revised rate of 715,000, and was 30.1 percent over the March 2011 estimate of 574,000. Permits for single-family homes in March were at a rate of 462,000, which was 3.5 percent below February’s revised figure of 479,000.

Construction starts on privately owned housing in March were at an annual rate of 654,000, which was 5.8 percent below February’s revised estimate of 694,000, but was 10.3 percent over the March 2011 rate of 593,000. Starts on single-family homes in March were at a rate of 462,000, which was 0.2 percent below February’s revised figure of 463,000.

Completed constructions of housing in March were at an annual rate of 600,000. This was 4.2 percent above February’s revised estimate of 576,000 and was 0.5 percent over the March 2011 rate of 597,000. Single-family housing completions in March were at a rate of 440,000, which was 1.4 percent over February’s revised rate of 434,000.

In employment news, initial claims for jobless benefits filed in the week ending April 14 dipped to 386,000, a decrease of 2,000 from the previous week’s upwardly revised figure of 388,000, the Employment and Training Administration reported last week. The four-week moving average was 374,750, an increase of 5,500 from the previous week’s revised average of 369,250.

The total number of insured unemployed workers during the week ending April 7 was 3,297,000, an increase of 26,000 from the preceding week’s revised level of 3,271,000, the Administration also reported. The four-week moving average was 3,317,750, a decrease of 21,500 from the preceding week’s revised average of 3,339,250.

As for Arizona economy, the news is good. In Greater Tucson, resale closings were up 33.0% at an annual rate in February. The median resale price was $144,500. Yet, the median foreclosure price was $93,900. The median price of a new home was $194,021. In Greater Phoenix, R. L. Brown reports resale activity in March down 6.7% from the heavy activity of a year earlier. New permit activity, though, continues to be strong. March permits were 1,036 units, a 60.6% gain from last year’s 645 units. Total new homes sales year to date in 2012 are over 31.2% higher than the same period in 2011 (1,838 vs. 1,401). In addition, the Arizona Regional Multiple Listing Service reported that the average price of a home sold thru MLS increased 17.3% over year earlier levels in March ($139,000 vs. $118,500). Supply/demand pressures and fewer foreclosures are likely to continue to put upward pressure on prices.

Unemployment rate in Arizona ‘s dropped to 8.6% in March after two consecutive months at 8.7%. The U.S. unemployment rate is 8.3%. A year ago, the Arizona rate was 9.6% and the U. S. rate was 8.9%. In March, employment growth in the State stood at 1.9% or 47,000 jobs above a year ago. Most of the Arizona jobs were created in Greater Phoenix which is up 2.3% from a year ago and has created 40,300 new jobs. Virtually all sectors reported gains, with educational and health services, leisure and hospitality, professional & business services and construction leading the way.

Category: Economy
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