Sales of existing or previously occupied homes rose for the third straight month in March to reach the highest level since 2009.
According to a survey conducted by Bloomberg on forecasts of a number of economists, it was revealed that sales probably hit a record high in March since November 2009, when home buyers rushed to take maximum advantage of a provisional tax credit.
Bloomberg conducted the survey just before the actual sales report by the National Association of Realtors, which come out on Monday, April 22. According to the forecast, existing home purchases probably climbed 0.4 percent in March. Apparently, this is the highest rate at which homes sold since November 2009.
The reasons for the rapid rate of sales are attributed to the historically low mortgage rates and credit availability. The improving rate of job growth and rising rate of property values have also accelerated the pace of home purchases.
"Housing is a very bright spot in this recovery, and it's one of the reasons why the recovery will stay on track. With people seeing broader healing in demand and gaining confidence because they don't expect prices to fall anymore, they're actually beginning to act," Eric Green, global head of FX research and rates at TD Securities Inc. in New York, said to Businessweek.
Moreover, according to a news analysis by the Herald Tribune, it was found that if the residential property market continues to appreciate at the current rate, prices could reach new ceilings within seven years.
However, some experts believe that the prices are high only due to the tight supply and once the supply surges, the prices will probably dwindle down. As the number of foreclosures and distressed property rates rise, supply is bound to get better in the next three years, which might bring down the prices.
Though the number of foreclosures fell in February, foreclosure filing spiked 10 percent in February. Foreclosure starts increased in 32 states. Nevada posted the highest rate of annual foreclosure start rates at around 334 percent. Maryland, Washington and New York followed recording 319, 172 and 139 percent, respectively.
"We still have a lot of distressed inventory, and furthermore, at some point the national economy has to begin wresting with the debt service. The price increase we have been seeing, particularly from the Wall Street funds, is speculation at its highest level," Dennis Black, a real estate consultant said to the Herald Tribune.