With the latest numbers on existing-and-new-home sales from the
National Association of Realtors(NAR), we can now close the books on 2015.
And quite a year it’s been.
As we’d expected, 2015 produced major growth and some big-time milestones in California’s housing’s recovery.
Jonathan Smoke, chief economist for NAR puts it this way. How good was it? Total home sales grew 7 percent over 2014 for the best year in real estate since 2007, based on 6 percent growth in existing-home sales and 15 percent growth in new-home sales.
The increase in 2015 was a stark contrast to the decline in total sales in 2014.
And en route to housing’s definitive recovery in 2015, we hit plenty of landmarks, including a new nominal record for the median price of existing homes in June, a substantial decline in distressed sales, an uptick in the share of first-time buyers, and an increase in the share of new homes among total sales.
NAR estimates from monthly sales and survey data that sales to first-time buyers were up 12 percent.
An improving economy, pent-up demand, and strong affordability brought more
Millennials and other first-time buyers into the market.
Sales to buyers relocating or resulting from a job change were up 8 percent as the country saw close to 2.8 million jobs created and the unemployment rate fell to 5 percent.
The new-home market grew in part because of builders responding to stronger and more consistent demand from entry-level buyers.
As a result of product starting to shift, the median price of a new home ended the year at $288,900, down 4.5percent from last year.
Not everything was about rainbows and green pastures, however, says Economist Smoke.
Distressed sales were down 19 percent as a result of fewer foreclosures and short sales. Sales to investors were down 10 percent as fewer distressed sales provided fewer bargains.
Even sales to international buyers were down 12 percent due to weak economic conditions abroad, combined with a much stronger demand.
What is NAR expecting in 2016?
More growth but it will be more moderate for existing-home-sales, and just a bit stronger for new-home sales. The demographics that fueled all that growth in 2015 should be just as strong in 2016.
More employment growth should lead to similar household formation, and affordability will still favor buying over renting for those who are qualified and ready to settle down.
All in all, now is the time to call your local Realtor and start searching for the home of your dreams.