Real estate commentary
Exploring the definition of the word "anticipation"
In 2005, Robert Shiller, professor of economics and finance at Yale University and co-founder of the Case-Shiller housing index, offered a century-long series of data on home prices, which revealed how unusual, risky and historically unparalleled the housing-price boom was at the time. A few knowledgeable observers embraced Shiller’s data, but unfortunately as the professor notes: “…a lot of smart people simply didn’t see the housing bubble, the instability in our financial sector, or the shock that came in 2007 and 2008.”
Today, Professor Shiller argues for a revolution in data gathering that would provide for better economic gauges that could help predict future crises. Until this happens, we are nonetheless left with a variety of indicators that are generally viewed as-if not perfect in their measurement-at least useful sources of information about the state of our current housing market. And as we approach the mid-point of 2011, there are some hopeful signs:
• Consumer spending, which makes up 70 percent of the economy, rose in March. Ajay Banga, CEO of MasterCard, Inc., told The Associated Press that: “The 90 percent of people who are employed no longer believe that their jobs are at risk and their willingness to spend has changed compared with six or nine months ago when there was fear.”
• The National Association of Realtors (NAR) reported that nationally, sales of existing homes rose in March, marking the sixth consecutive monthly rise for this type of purchase. Noting this development, NAR chief economist Lawrence Yun observed: “We’re clearly on a recovery path.”
• The U.S. Department of Commerce reported that new home sales in March jumped 11 percent over the previous month, while the median price of a new home increased by 3 percent over the same period of time.
• According to a forward-looking indicator based on contract signings, NAR’s Pending Homes Sales Index posted a 5.1-percent increase in March over the previous month. In data released last month by the Santa Fe Association of
Realtors, one-half of Multiple Listing Service (MLS) areas in the local region saw an increase in housing sales during the first quarter of 2011, while 11 of the 18 MLS areas noted an uptick in median house prices.
Anticipating further positive growth in the housing market, the National Association of Home Builders (NAHB) reports that their Remodeling Market Index rose to a four-year high in the first quarter of 2011. According to NAHB chief economist David Crowe: “Home remodeling continues to slowly increase and continued growth through the year is expected.”
June marks the two-year anniversary of the launch of the All Things Real Estate weekly radio show (www.ATREradio.com) and monthly newsletter. As we approach this milestone, we are proud of the contribution these sources of useful and timely information have added to the dialogue about real estate in general. In the coming months, we will be venturing into Internet streaming and videotaping of the radio show, making the program available to anyone in the country to listen to in “real time” and also to watch at their leisure via their computer or electronic device.
And in a move that we are humbled by and incredibly appreciative of, All Things Real Estate has been nominated for the Santa Fe Chamber of Commerce 2011 Business Excellence Award. This prestigious award is presented in June to a nominee that meets Chamber criteria for business growth, significant accomplishments, excellence in customer service, and unique or visionary business practices.
There are a number of people who have worked very hard to bring All Things Real Estate to the point where others have deemed it deserving of this special recognition. Our goal has been to provide high quality commentary on real estate issues that everyone seems to be seeking, and along the way, take a little bit of the mystery out of the process that scores of buyers, sellers and home owners find themselves in as participants in achieving the American Dream.
To our supporters, we send you a very heartfelt thank you and look forward to many more years of working with you in making a strong economic recovery a reality.
So, for now—and until next month—I wish you good luck and fortune in “ALL THINGS REAL ESTATE.”
Rey Post is Managing Editor and Associate Broker of Sotheby's International Realty.