Real estate rebounding?
I’m not so sure if real estate is making a comeback yet as many are predicting.
Here is my thinking. Click on the link below to view a google trends chart.
This chart shows search trends based on home buyers early searches in the home buying process. (Note: first time buyers make up about 39% of sales)
- buying a home (general query where buyer starts learning process)
- how much house can I afford? (first steps after potential buyer has decided they would like to buy)
I believe that last NAR data I saw was that Avg. buyer takes about 6-12 months from initially thinking "I think I want to buy a home" to finding a home and successfully purchasing.
I can’t find the actual report but this time range is supported by this highlight of the most recent NAR home buyer study http://www.realtor.org/reports/highlights-from-the-2012-profile-of-home-buyers-and-sellers
“typical home buyer searched for 12 weeks and viewed 10 homes”
Then takes another 1-3 months to close the escrow after finding a home. Just this is 4-7 months. Only then is it reported as an existing home sale.
This does not include the time frame they spent prior to started the home search just trying to decide if they should buy or not.
I think the recent signs of life in the market and the upticks in existing home sales from earlier in the year where due to the initial inquiry wave from 2011 – early 2012. Home prices still going up due to contracted inventory, not buyer increased buyer demand.
The recent existing home sales have slowly been decreasing (http://speakingofrealestate.blogs.realtor.org/2012/10/22/home-prices-up-11-percent/
) which correlates with a 7-12 months after the wave of the above chart.
I’m I wrong? What are your thoughts?