The First Quarter comes to a close & we welcome the Spring selling season “This Week in Real Estate” at a time when consumer confidence reaches a decade & a half high. Below are a few highlights from the last week of March that influence our business…
* Consumer Confidence Surges to 16-Year High. Consumer confidence leapt forward in March to the highest level in 16 years, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen. The Consumer Confidence Index improved significantly in March to 125.6, up from 116.1 in February. The Present Situation Index increased from 134.1 to 143.1 and the Expectations Index increased to 113.8, up from 103.9 last month. “Consumer confidence increased sharply in March to its highest level since December 2000,” said Lynn Franco, The Conference Board director of economic indicators. “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”
* Pending Sales Spring Up. The Pending Home Sales Index increased 5.5% in February 2017 to its highest level since April 2016, and the second highest since May 2006. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased to 112.3 in February, up from 106.4 in January and up 2.6% from the same month a year ago. The PHSI increased in all four regions, ranging from 11.4% in the Midwest to 3.1% in the West. Year-over-Year, the PHSI increased 6.6% in the Northeast and 4.2% in the South, while falling slightly in the West and Midwest. February existing sales were slowed by inventory constraints, and these shortages are expected to continue, especially in the lower- and mid-market price ranges. However, builder sentiment remains strong, and new home sales are trending positive. As the economy continues to add jobs, increased demand among first-time buyers will help fuel new and existing sales in 2017.
* Home Prices in the First Month of 2017. S&P Dow Jones Indices released the Home Price Index for January 2017 on Tuesday. The Case-Shiller U.S. National Home Price Index rose at a seasonally adjusted annual growth rate of 7.9%, slower than the 9.2% increase in December. House prices dropped to the lowest level in the first month of 2012. Five years later, house prices surpassed the pre-recession peak of 2006 and hit the highest level historically. Of the twenty (20) major U.S. metropolitan areas highlighted in the report Seattle had the highest annual home price appreciation growth rate at 22.6%, followed by Chicago (16.5%), Denver (14%), Washington D.C. (12.7%) and Portland (12.2%).