Real Estate Recovery is Losing Steam

It’s been said that “timing is everything”. After big gains in 2013, the best opportunity to sell real estate may be waning. Recent data indicates that the real estate recovery that started last year has become a little sluggish this year. Consider the following data for the first quarter of this year, released by the National Association of Home Builders and the National Association of Realtors:

• New home sales dropped 14.5% in March from a month earlier.
• Pending home sales were up slightly at 3.4%, but this was after a 15% drop from June 2013 to February 2014.
• Housing starts were up slightly in March, but building permits were down by 1.7% month over month.
• A recent NAHB survey indicates that the spring selling season may be a disappointment.
• Most experts have revised their forecasts downward, for housing starts this year.
• Existing home sales are expected to be lower this year nationally, because of the slow start in the first quarter.
• Lackluster performance in housing starts and real estate activity have led most experts to reduce their projections for GDP growth in 2014.

The one bright note for real estate is that inventory levels remain low. This may help stabilize prices, but may not be enough to lead to significant appreciation. It’s been argued that the best time to sell is when people are still buying. There may be a little time left to slip through the window of opportunity to sell that opened last year.