It was a big month last month for home sales nationally. Existing home sales (which are single family homes not including new construction) rose 10% from the previous month. Home sales were up 23% from one year ago. The pace of home sales last month was a seasonally adjusted 6.1 million homes sold. This number means at the current pace, homes are selling at a rate of 6.1 million per year. This is the highest pace of home sales since February 2007. Also, interest rates touched an all time low a couple weeks ago at a national average of 4.77% for a 30-yr mortgage. One last number to consider: Inventory (total homes for sale) has dropped to 3.57 million. This means that the current months of inventory (the length of time to absorb the current homes for sale) is now just 7 months. It was 10 months a year ago. Most people consider 6 months as a healthy market.

My take on the market: Real estate is a segment of the market that follows the same rules as everything else in economics: supply and demand. Two things have happened in the last few months. First, supply has dramatically decreased. New construction has virtually come to a halt, which is good for the market right now as the last thing we need is more homes on the market. Second, demand has significantly increased thanks to low interest rates and lower home prices. Despite the negative media attention, the doom-and-gloom, and all the problems our government has gotten us into… been trying to deal with, the real estate market will, and is, recovering.

Raleigh real estate is one specific section of the national market that is extremely healthy compared to the rest of the nation. Here, sales are up 28% from a year ago and the amount of Raleigh homes for sale has dropped about 15% from this time last year. Our location continues to rank among the top 5 places for population growth and I believe that fundamentally, we live in one of the best real estate markets in the country.

See the video below on the world’s greatest investor commenting on the residential housing market recovering. I disagree with a lot of what Mr. Buffett believes politically,  but I agree that the residential market has reached bottom, and like any other market, it goes up, down and back up again.  One thing I agree with him is his go-to investment strategy of buying when everyone else is fearful. There are still hurdles to jump over, and this will not be the last recession we face, but I truly believe that this could be the best buying opportunity most of us will ever see. I’m actively looking for property to buy and I would encourage you to do the same.