There's nothing like boots on the ground to get down to earth information about the real estate market - especially during a housing recovery.
Statistics are, after all, "damn statistics" and just numbers that are easily manipulated, often misinterpreted and typically lagging behind true housing market conditions.
If anyone knows what's really going on in the housing market, it's real estate agents, and other realty professionals, working the trenches, cycle after cycle.
Real estate agents say the housing market is in the pink, healthy and growing, according to an ActiveRain survey of 2,430 real estate professionals, "Real Estate is Back."
"After five long years of bad news, the prognosis for the health of the U.S. real estate market in 2013 is surprisingly strong," according to RealEstate.com, which breaks down the survey data.
Real estate agents forecast not just incremental, spotty improvements but "robust growth in the U.S. real estate market" in 2013.
The survey found:
- Nearly all real estate agents, 84 percent, believe that real estate values and the number of real estate transactions will increase in 2013, giving more sellers an opportunity to move up or sell at a profit.
- The vast majority of real estate agents, 77 percent, believe that new construction starts will continue to increase and help fill gaps in the short housing supply.
- Most real estate agents, 74 percent, believe that their local economy will improve in 2013, compared to 2012.
RealEstate.com said not a single major market is expected to see a decline in home values or real estate transactions in 2013. In 2012, one-third of the markets expected declines in home values.
Also last year, industry insiders believed real estate values and new construction starts would be flat, but the number of real estate transactions would increase slightly.
2012 vs. 2013 Real Estate Confidence
(In the above chart, on a scale of 1 to 5, 1 represents a significant decline, 3 represents no change, and 5 represents a significant increase.)
The housing recovery also comes with investment opportunities for 2013 that are comparable with those from 2012, with only a slight reduction in confidence, especially for single-family rentals, followed by rental properties, and multi-family rentals, RealEstate.com reports.
There's also renewed confidence in newly constructed single-family homes and condos.
Optimism for 2013's continuing housing recovery is particularly acute in some of the markets previously hardest hit by the down turn.
In California, the technology industry is driving new wealth creation and rapid real estate price appreciation, not just in Silicon Valley in the north, but also from San Francisco, further north, to San Diego in the south.
Los Angeles, Phoenix, and West Palm Beach and Fort Meyers, FL, are working through issues with shadow inventories. Some of the largest increases in home values are also high-cost-of-living markets and include San Diego, San Francisco, Honolulu, and Los Angeles.
Hallmarks of a housing recovery
RealEstate.com credits a host of factors for the housing recovery.
- Populations and economies are growing in the Midwest, South and Mountain States. Americans are moving from high-tax, high-cost-of-living markets to lower cost regions.
- Corporate America is moving, too. Bottom lines of slimmed down corporate operations demand moves to areas with lower operating costs, lower taxes and lower costs of living. In Texas, for example, low costs of living and long-term economic prospects make it a popular destination for migrating businesses.
- Forecasts predict the U.S. will become a net energy exporter by 2017, thanks largely to new oil extraction (fracking) technologies in North Dakota, Texas, Oklahoma, Arkansas, Ohio, Pennsylvania, West Virginia, and Michigan. The economic boost will have a flow down effect on local real estate markets.
- Manufacturing could get a boost from cheaper labor and energy, strong patent protection and infrastructure improvements. Large multinational corporations are looking to build new manufacturing plants in the Midwest rather than offshore.