Consumer Confidence is a Barometer for the Real Estate
More and more the telltale sign for a recovering real estate market has to do with consumer confidence. Rightly so for employment and financial security are rooted in the confidence of Americans. A new study has just been released showing signs of improvement in consumer confidence.
“We all know how important a role consumer confidence plays in any economic recovery, and most definitely in home buying decisions. Now a new national poll of consumer attitudes offers some encouraging news for the months ahead.
The survey was conducted by the Certified Financial Planning Board of Standards in early July, and involved interviews with a statistically representative sample of more than one thousands households.
The findings: Despite nervousness about the stock market and employment, 66 percent of all consumers “believe the economy will hold steady or improve over the next six months.” Eighty three percent believe their own personal finances will get better or at least hold their own.
Most consumers, said researchers, are looking for a “long and slow return to (economic) growth,” meaning gradual improvements in major sectors of the economy, including home sales and real estate generally.
Does that slow and steady theme sound familiar?
Well, it certainly does to real estate analysts at MDA DataQuick in San Diego. Their latest report on southern California’s housing markets describes a “continuing slow crawl toward normalcy” underway.
Nothing spectacular, nothing that will blow you away, just plodding ahead with modest gains.
From May to June, home sales rose by 7.2 percent in the six big counties comprising southern California – Los Angeles, Riverside, San Diego, Ventura, San Bernadino and Orange. Total sales were the highest since June of 2006.
John Walsh, president of MDA DataQuick, said the market there is still “out of kilter” by historical standards – with lots of foreclosures and short sales acting as a restraint on prices.
But he added that despite all the challenges, “more money was spent last month in southern California (buying houses) than in the past two years, and more money was loaned” for home mortgages.
That’s highly significant because the six counties of southern California are sort of the canaries in the mineshaft for the housing market. They were extremely hard hit during the recession, and they have a long way to go to come back – but it’s happening.
Meanwhile there are growing indications of similar patterns underway in other major markets around the country — even noteworthy gains in home values.
Corelogic, the giant real estate data company, released its latest “home price index” last week, and found that prices on a national basis are now 2.9 percent higher than they were the same time the year before – and that’s counting in distressed sales.
Prices were up in 60 of the top 100 real estate markets — a big change from a year ago, when all 100 were negative.”
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