Viewed daily, the stock market looks like a roller coaster. Viewed from a longer period, the market charts a smoother path that indicates a trend.
The housing market appears to follow the same course. Extrapolated from a single month, statistics show either triumph or tragedy. With hindsight, the numbers reveal a trend that, while not indicative of future performance, can give us some basis for confidence, and action.
As we close out 2012, monthly numbers for housing display a similar pattern. The S&P/Case-Shiller index of property values in 20 cities, released this morning, shows seasonally unadjusted prices dropped 0.1 percent in October from the prior month. But year over year, property values in 18 of the 20 cities increased an average of 4.3 percent.
Sales this year have followed a similar pattern. Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November, according to data from the National Association of Realtors. The November number stands 14.5 percent higher than a year ago, with sales at the highest level since November 2009.
The picture for construction remains mixed. New-home starts declined by 3 percent from October to November. Yet year over year, new construction has risen 21.6 percent.
The trend holds in some of the hardest-hit areas of the country. Take bellwether Florida. Sales of existing stock declined 4 percent in November but posted a 24 percent gain over the past 12 months. The real success story was in new-home sales. Year over year, Florida housing starts jumped in November by 60.2 percent and median home prices rose by 11.2 percent, according to data released last week by Florida Gov. Rick Scott.
In regions driven by real estate, the pattern looks even more dramatic. In Southwest Florida, sales of existing homes rose 2 percent from October to November and 25 percent from the same time a year ago. New-home construction in Sarasota and Manatee counties dipped in November by 21 percent but posted an 88 percent year-over-year increase. Those numbers are important because Southwest Florida usually experiences a season dip in real estate sales.
Despite the occasional setback, the trend seems clear. Real estate and construction are back. That’s a resolution we hope the markets can keep.