Home Sales Starting to Show Life After Bottoming in January

• April housing statistics suggest that the residential sales market may be approaching bottom, as sales velocity for both condos and single-family homes increased during the month. While this is a positive sign, sales are still below levels from a year ago.


• The rebound in sales can be attributed to investors and first-time homebuyers purchasing distressed properties. Distressed sales accounted for between 45 percent and 50 percent of recent sales, while first-time buyers accounted for 40 percent of the transactions in April.


• The increasing inventory of homes for sale remains a concern for the recovery of the housing market. The months' supply of single-family homes increased from 9.1 to 9.6 months, while condo supply increased from 15 to 15.1 months. A balanced market typically has four to seven months of supply.


• On a year-over-year basis, the supply of single-family homes has declined from 10.7 months, whereas the supply of condos continues to grow from 14.7 months.


• The increase in sales activity by first-time home buyers and investors will further elevate competition for rental units. This will put additional pressure on apartment owners to raise concessions.


• The bottoming of the housing market sets the stage for recovery over the next year, as many of the jobs lost since 2008 were housing-related positions. A recovery in this sector will help to stabilize the economy and commercial real estate.