Forward Momentum in the Real Estate Market

As the national economic recovery continues to transition to a slightly stronger growth path, we also continue to see improvements in the real estate market:

1. According to the National Association of Realtors (NAR), the number of existing homes that sold in January edged up, while a seller’s market is developing and home prices–nationally–continue to rise steadily above year-ago levels.
2. Exceptionally low interest rates helped ensure a gain in nationwide housing affordability in the final quarter of 2012, according to the National Association of  Home Builders Index.
3. The U.S. Department of Housing & Urban Development and the U.S. Census Bureau reports that the issuance of new home construction permits rose in January 1.8 percent to 925,000 units—the quickest pace since mid-2008. This news prompted Rick Judson, chair of the National Association of Home Builders, to state: “Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product.”
4. Doug Duncan, Chief Economist with Fannie Mae, a national mortgage financecompany, states that: “Our outlook for 2013 is bolstered by the employment picture, which is trending better than previously reported, as well as the momentum in manufacturing and energy production. We also expect the housing recovery to broaden this year.”
5. Reinforcing Duncan’s view, Susan Wachter, Professor of Real Estate at the prestigious Wharton School (University of Pennsylvania), was quoted during a CNBC interview on February 26 as stating: “The 2013 housing recovery is a process…it will be good this year.”

And as economic conditions are improving, so is the forecast for home remodeling. At the annual exposition of the National Association of Home Builders in January, Paul Emrath, Research Vice President with the organization, stated that: “The outlook for home remodeling in the year ahead is the best it’s been in almost a decade, based on the most recent surveys of the industry.” 

This reality will be on display here in New Mexico when the Santa Fe Area Home Builders Association stages its annual “Home Show” at the city’s Community Convention Center on March 9-10. Scores of home builders, design professionals, home product suppliers, and other vendors will be offering advice on remodeling as well as demonstrations of products and services that home owners and buyers are seeking.

And to demonstrate further that the field of home design and remodeling is flourishing, the “Home Show” will also feature the inaugural Santa Fe Community College Design Competition. This element of the two-day event will feature students from the institution who are offering their own projects and interpretations on new and thoughtful home design and remodeling options that are important to home owners in the current market. According to the 2013 Remodeling Cost vs. Value Report from the National Association of Realtors (NAR), several types of remodeling projects can recoup substantial value at the time of a home resale.

As an example, a minor kitchen remodel can return 75.4 percent of costs, while the report also found that a majority of the top 10 most cost-effective endeavors are exterior replacement projects, which are estimated to recoup more than 71 percent of costs. As NAR President G ary Thomas states: “Realtors know that curb appeal projects offer great bang for your buck, because a home’s exterior is the first thing potential buyers see.”

Obtain some remodeling tips for your own home by joining us at the Santa Fe Area Home Builders “Home Show” on March 9-10 (for information go to www.sfahba.com). If you can’t be there in person, tune in to a two-hour “live” remote broadcast of the “All Things Real Estate” radio show on Sunday, March 10 (12 - 2 p.m. — MST); streaming images and commentary from the event will be on the homepage of SantaFe.com.

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