Improving real estate market will boost the number of available construction jobs
The American real estate market is on the mend. After years of troubles following the housing bust of the mid-2000s, many potential homebuyers delayed purchasing a house. However, recent improvements regarding the economy are leading to an increase in home purchases.
According to real estate market researcher, Zillow, January annual home sales demonstrated that 2013 is forecast to be a strong year. Home values in January 2013 increased for the 15th consecutive month to $158,100. Between December 2012 and January 2013, property values increased 0.7 percent. In addition, home values improved 6.2 percent in a year-over-year comparison - the largest recorded since July 2006. In fact, the last time home values were at this rate was in June 2004.
"The winter months are typically when things cool off in the housing market, but high demand and continued tight inventory in many markets have helped keep things at a boil through the early part of 2013," said Zillow Chief Economist Dr. Stan Humphries. "Demand will continue to be high throughout 2013, which will help home values and rents alike continue to rise. Foreclosure activity remains high, despite recent drop-offs. This will have the dual effects of nurturing rental demand, as displaced former homeowners seek new lodgings, and of adding supply to many markets, as foreclosed properties re-enter the market."
Not only are home values increasing, but they are also becoming more easier to obtain through an adjustment to loan practices. According to the National Association of Home Builders, low interest rates on mortgages has helped stabilize the housing market and make purchasing a house more affordable for Americans in the last quarter of 2012.
"The most recent housing affordability data should be encouraging to many prospective home buyers, because it shows that homeownership remains within reach of median-income consumers even as most local markets appear to be on a recovery path," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.
According to the source, 74.9 percent of homes that were sold between October 1, 2012 and December 31, 2012, were affordable to families earning the U.S. median income of $65,000. This affordability is up slightly from the previous quarter in 2012.
"The median price of all new and existing homes sold in the fourth quarter of 2012 was $188,000, essentially unchanged from the previous quarter's $189,000 that marked a nearly three-year high," noted NAHB Chief Economist David Crowe. "It is noteworthy that affordability remains historically high thanks to favorable mortgage rates even as national home price indexes show some rise in values."
The major metro areas that showed strong affordability were Ogden-Clearfield, Utah; Dayton, Ohio; Indianapolis-Carmel, Indiana; Lakeland-Winter Haven, Florida, and Syracuse, New York. In contrast, the areas with poor affordability rates included San Francisco-San Mateo-Redwood City, California; Santa Ana-Anaheim-Irvine, California; Los Angeles-Long Beach-Glendale, California, and Honolulu, Hawaii.
The increase in affordability rates for much of America and the appreciation of home values will have the combined effect of driving new home construction. Potential homebuyers were cautioned against purchasing a property when the investment would decrease savings and put an individual in debt and yet not have a high yield positive result because real estate values were so low. However, as the economy has continued to steadily improve, more buyers are combing the market for the right property.
As a result, many construction companies specializing in new structures and remodeling may be finding it difficult to keep up with demand. After years of working on smaller projects with less going on many companies got by with less equipment. To meet new job demands, a business is most likely search for affordable tools and pieces of equipment. Online auctions provide companies an ideal place to find equipment at an affordable price.
