When real estate really tumbled in 2007 and 2008, I remember hearing from the pundits that it could well be 2012 or 2013 before real estate came back. Well, here we are in 2013 and it looks like real estate may be back.
Nationally, sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, according to a recent Bloomberg News analysis. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012.
Are we back to where we were? That depends on what you mean by “back” or “where we were.” In a strategic planning session at SAR a couple years ago, one of our wise volunteers commented, “Our Members need to understand, their old normal isn’t coming back.”
Our current normal is a world of tight inventory and tighter lending rules. Affordability is up and mortgage rates remain low. Rentals are also on the increase.
Nationally, home equity is growing again significantly after five years of declines and stagnation. Outside real estate, this good news hasn’t received a lot of attention. After hitting a low of $6.45 trillion in the final three months of 2011, American’s combined home equity jumped nearly $1.3 trillion during the next nine months to $7.71 trillion – a 20 percent gain – according to a quarterly estimate from the Federal Reserve quoted in a recent Los Angeles Times article.
We all hope that higher prices will begin to convince more sellers that they should list their homes, pushing inventory up and creating a healthier, more balanced real estate environment for 2013.
The median Sacramento home priced ended 2012 up 4.30 percent. This is the greatest year-to-year increase in the Sacramento median since 2005.
Job growth in the Sacramento region is expected to improve through the third quarter of 2013, according to the Sacramento Region Business Forecast, a publication of the Sacramento Area Commerce and Trade Organization (SACTO) and the Center for Strategic Economic Research (CSER).
I am optimistic about the year ahead of us. I am looking forward to presiding over a year of real growth in the Sacramento region.