Most of us already realize “normal” is relative. Yet, we are only human. And as such, we can scarcely stop ourselves from the very-human behavior of seizing every available opportunity to try to quantify and define the term.
Thanks to the folks at real estate data company Trulia, we don’t need to try very hard to define what’s “normal” for the housing industry. They’ve done it for us with the Housing Barometer, a monthly report that charts how quickly the housing market is moving back to normal based on the performance of construction starts, existing home sales and delinquency-plus-foreclosure rates. The barometer looks at how current conditions stack up against those recorded at the depths of the housing crisis and those recorded before the housing bubble burst.
As of March 2013, the Housing Barometer shows the U.S. housing market is more than half way back to normal – 56 percent of the way there, to be exact — up from 43 percent six months ago.
Trulia notes that in March 2013 we saw residential construction post a 47 percent annual gain, and reach its highest level since June 2008. Although existing home sales dipped slightly between February and March, they still were 10 percent higher than they were a year ago. Meanwhile, the share of mortgages in delinquency or foreclosure dropped to 9.96 percent, down a full percentage point from the year prior.
While recovery is slow – the market improvement between February and March was only two percentage points -- it’s on the right track. One year ago, the market was only a third of the way back to normal, Trulia reports, underscoring the significance of current market indicators.
In other good news, Jed Kolko, Trulia’s chief economist, said the March 2013 improvement is even better than it looks. The shift of sales from distressed to conventional and early signs that the inventory crunch may be easing should bring some relief to prospective homebuyers.
• Andy Warren is President of Maracay Homes, the Arizona subsidiary of the Weyerhaeuser Real Estate Company. He serves on the Board of Directors for the Home Builders Association of Central Arizona and Greater Phoenix Leadership; as well as the Board of Directors and as an Executive Committee member with the Greater Phoenix Economic Council. He is also an active member of the Urban Land Institute.