The first quarter of 2011 ended with decent home sales activity. Existing homes sold at a 5.1 million unit annualized pace after accounting for seasonal factors. That pace – if sustained – would beat last year’s total sales of 4.9 million units. Actually, first quarter sales may have been even better had the snow storms not been as heavy in the Midwest and Northeast regions; unfortunately, both regions suffered six percent declines from the same quarter of 2010. At the same time, the South and West regions experienced year-over-year gains in the first quarter: resales were up by three percent in the South and two percent in the West from the first quarter of 2010.
Additional happy spring tidings were the recent pending contracts report. Pending home sales for March imply a modestly better figure in the second quarter compared to the first quarter. The third and fourth quarters of this year will surely look better than last year’s slump over the same period because of the expiration of home buyer tax credit. We may even see contract signings top those in the first half of this year – provided jobs continue to be added to the economy. All that points to a near-certain prediction that the annual home-sales tally for 2011 will be better than for 2010. Indeed, our baseline projection is for an eight percent gain in existing-home sales – for a 2011 annual total of 5.3 million units. Aside from jobs, which are anticipated to rise by 1.8 million in 2011, there are several additional reasons to be optimistic. Read more