Pending home sales point to hopeful sign for housing

Colder than average temperatures and heavy snow in much of the U.S. failed to keep February home buyers away. Signed contracts to buy existing homes rose 3.1 percent from January, according to the National Association of Realtors (NAR).

The Realtors’ so-called “Pending Home Sales Index” is 12 percent higher than one year ago, and is at its highest level since June, 2013.

The gains were primarily driven by sales in the West and Midwest. Pending sales jumped 11.6 percent month-to-month in the Midwest and are now 13.8 percent higher than a year ago. Sales in the Northeast fell 2.3 percent but are 4.1 percent above a year ago. Sales in the South decreased 1.4 percent sequentially, but are 10.8 percent above last February. Sales in the West climbed 6.6 percent and are now 18.3 percent above a year ago.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, chief economist for the NAR. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle-especially for first-time buyers-continues to be the depressed level of homes available for sale.”

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Higher prices and tight supply continue to hamstring the market. Total housing inventory at the end of the month was slightly lower than February of 2014, and new listings are not coming on a nearly the pace needed to meet demand. Closed February sales of existing homes, which represent contracts signed in December and January, improved only slightly, up 1.2 percent month-to-month. Home builders have also not ramped up production, citing still tight credit for construction loans and rising prices for land in the best locations.

“Many are now facing lot shortages,” said Stephen Paul of Maryland-based Mid-Atlantic Builders. “Public [builders] are buying more land direct and squeezing out the traditional land developer margins. That is causing more builders to have to develop their own lots, for which they may not have the resources or expertise.”

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The Realtors predict total existing-homes sales in 2015 to be around 5.25 million, an increase of 6.4 percent from 2014. They also predict the national median existing-home price for all of this year to increase around 5.6 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.

More From CNBC

Pending Sales of U.S. Homes Rose More Than Forecast in February

(Bloomberg) — More Americans than forecast signed contracts to purchase previously owned homes in February, indicating a pickup in the housing market ahead of the spring selling season.

The index of pending sales increased 3.1 percent to 106.9, the highest since June 2013, after a 1.2 percent gain the prior month that was smaller than initially estimated, figures from the National Association of Realtors showed Monday in Washington. The median forecast of 35 economists surveyed by Bloomberg called for a 0.3 percent rise.

Employment gains and rising rents encouraged buyers to take advantage of cheap borrowing costs in February even as some contended with frigid weather. Stronger wage growth and an increase in the number of homes for sale would help provide an additional boost for the market this spring, when buying interest typically heats up.

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“Pending sales showed solid gains last month, driven by a steadily improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” Lawrence Yun, the NAR’s chief economist, said in a statement. “These factors bode well for the prospect of an uptick in sales in coming months.”

Estimates in the Bloomberg survey ranged from a 5 percent decline to a 2 percent increase. The Realtors’ group revised the January data from a previously reported 1.7 percent increase.

Two of four regions saw an increase, reflecting an 11.6 percent jump in the Midwest and a 6.6 percent gain in the West, the report showed. Pending sales fell 2.3 percent in the Northeast and 1.4 percent in South.

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Last Year

The index increased 12 percent on an unadjusted basis versus a year earlier, after a 6.1 percent gain in the prior 12-month period. It was projected to climb 8.7 percent, according to the Bloomberg survey median.

A reading of 100 in the pending sales index corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.

Economists consider pending sales a leading indicator because it tracks contract signings, as opposed to purchases of existing homes, which are tabulated when a deal closes, typically a month or two later.

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The latter makes up more than 90 percent of the housing market. Re-sales rose 1.2 percent in February to a 4.88 million annual rate, the NAR said March 23.

A report from the Commerce Department on March 24 showed new-home sales, which account for about 7 percent of the residential market, unexpectedly rose in February to a seven-year high. New-home sales are also tabulated when contracts are signed, indicating the market strengthened during the month.

To contact the reporter on this story: Nina Glinski in Washington at nglinski@bloomberg.net

To contact the editors responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle

More from Bloomberg.com

Pending Home Sales Jump 3% in February

The National Association of Realtors (NAR) on Monday morning released its data on pending sales of existing homes for February. The pending home sales index rose 3.1% from a slightly downwardly revised index reading of 103.7 in January to the February reading of 106.9. That is 12% higher than in February 2014, when the index reading was 95.4. The February reading is the highest since June 2013 and marks the sixth consecutive month of year-over-year gains, with each month’s gain higher than the previous month’s.

The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001. The index has been above 100 (the “average” reading) for 10 straight months.

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The NAR’s chief economist noted:

Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents. These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle — especially for first-time buyers — continues to be the depressed level of homes available for sale.

Strong sales in the NAR’s Midwest and West regions more than outweighed smaller declines in the Northeast and South. Sales in the Midwest rose 11.6% to an index level of 110.4. West region sales climbed 6.6% to 102.1. Sales in the Northeast region slipped 2.3% and sales in the South fell 1.4%.

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National Association of Realtors Sees Slow Uptake of .realtor Domains

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Registrations for .realtor domain names have declined, but the low level of interest could point to larger issues with how generic top-level domains are being created and marketed to consumers.

More than four months after the National Association of Realtors (NAR) announced that it would offer its members .realtor top-level domains, few Realtors have taken advantage of the exclusive perk.

NAR instituted the .realtor domain benefit, along with a variety of extras, in the hopes that it would set apart its licensed real estate agents and provide them with professional clout.

“When consumers visit a .realtor website they will know that they have reached a source of comprehensive and accurate real estate information, as well as someone with unparalleled insight into the local market,” NAR President Steve Brown said in a statement last August.

However, the number of .realtor domain-name registrations has plateaued at about 95,000 since they first became available, far below the 500,000 personalized domains that the organization had planned to offer.

A poll conducted by Inman last year indicated that more than eight out of 10 readers of the real estate news site planned to apply for their own .realtor domains, suggesting that, in theory, 800,000 new websites could have been registered.

NAR has a ways to go before it reaches anywhere near that number. At the current rate of registration—around 60 registrations per day, according to Inman—it would take NAR 18 years to give away its 500,000 .realtor domain names, according to nTLDstats data.

Part of the problem could lie in the restrictions that NAR places on the use of these top-level domains, according to Inman. Users must follow NAR’s business rules [PDF] in registering domain names, limiting their creative options.

And the .realtor name and concept don’t appeal to everyone. Last fall, Inman contributor Teresa Boardman wrote a column, “Why I Don’t Want To Be a .Realtor”, in which she argued that “[t]he domain names are more about real estate, not about me.”

“I never wanted to be part of a big national company,” Boardman explained. “I always wanted to be the local real estate agent helping others in the community.”

Despite the lull in .realtor registrations, NAR remains optimistic that the offer will entice more members. NAR Spokeswoman Sara Wiskerchen told Inman that the association is “pleased with the number of .realtor registrations, which are going well and higher than expected.

“We anticipated continued and steady growth after the initial rush of registrations, and believe that ongoing education and launching association and brokerage domains in the near future will keep .realtor front and center,” she added.

Top-Level Troubles

And it’s not just NAR that’s struggling to make its personalized domain names attractive to consumers; .realtor is only one name drowning in a sea of top-level domains that have yet to gain significant traction online.

One of the major issues is compatibility with existing devices and software. The Internet Corporation for Assigned Names and Numbers (ICANN) is scrambling to adapt to the deluge of generic top-level domains cropping up online, from .pizza to .lol, Forbes reports.

“New types of domains and email addresses break stuff,” Brent London, Google’s representative in an ICANN working group, said at a meeting of the organization, according to Forbes. “Just to send an email from one person to another, you’d find yourself in a situation where an operating system, mail servers, routers, mail service providers, security software, all need to work properly.”

Speaking at the domain-names industry conference NamesCon 2015, Akram Atallah, former chief operating officer of ICANN and current president of its global domains division, explained the roadblocks preventing generic top-level domains from flourishing.

“New [gTLD] registries are still trying to find their footing,” Atallah said, according to The Register. “We are seeing a lot of new entrants.”

Additionally, big brands are also waiting on the sidelines for others to get in on the domain-name game. Generic top-level domains are a complicated new territory to navigate, and businesses may be hesitant to be pioneers of this form of digital marketing.

“This is a new way of doing things online so it’s mostly a competitive issue: A lot of them are sitting around the pool waiting for the first one to jump in,” Atallah said, as reported in The Register.

For now, all that associations can do is be patient as the technical difficulties and marketing challenges of top-level domains are ironed out. It could be awhile before .ninja is as wholly embraced as .com or .org.

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Julia Haskins is a contributor to Associations Now. More »

February’s Pending Home Sales Hit Highest Level Since June 2013, Says NAR

The number of contracts signed to buy previously-owned homes in February hit the highest level since June 2013, thanks to big leaps in the Midwestern and Western regions, the National Association of Realtors said Monday.

NAR’s Pending Home Sales Index, which tracks contract signings (as opposed to closed sales), rose 3.1% in February to 106.9, from a downwardly revised January level of 103.7. (An index of 100 represents an average level of contract activity.) That level was 12% higher than in February 2014, when the index stood at 95.4, and marks the sixth consecutive month of year-over-year gains. February’s index is at its highest level since June 2013, when the measure stood at 109.4, and surpassed expectations of economists surveyed by Bloomberg ahead of the release.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4% and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, NAR’s chief economist. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale.”

A separate report from NAR showed that the share of first-time home buyers increased to 29% in February from 28% in January, marking the first increase since November 2014.

Yun also said that inventory is tighter at the lower end of the market, where first-time home buyers tend to purchase.

February’s index read continues a shift in the market that began last September. Before that month, contract signings had been down on a year-over-year basis since September 2013, as quickly rising prices slowed the pace at which Americans were purchasing homes. As price gains slowed down and investors exited the market, contract signings have crept up.

Overall, the housing reports released in March show a market that is stabilizing. Though construction starts fell a dramatic 17% in February compared to January, they were just 3.3% below February 2014 groundbreakings, according to Commerce, and can be largely blamed on unusually harsh winter weather. A report last week showed sales of previously-owned homes up 1.2% in February as supply remains tight and prices rise. Tomorrow we’ll get the latest data on sales prices for previously-owned homes in January; at this point we know that prices for previously-owned homes continued to slow down in December (the most recent data available from SP/Case-Shiller) carrying on a nearly year-long streak of slow-downs.

The rising number of contracts for previously-owned homes suggests that as prices moderate, consumers are getting back into the buying game. Today’s pending home sales report is considered a more timely pulse of the market than other reports because it is forward-looking, based on contracts signed rather than closed transactions. (Closings generally come one to two months after a contract is signed.) The biggest pressure for buyers appears to be tighter inventory, which is helping to keep prices on the rise. 

The national median sales price for existing, or previously-owned, homes for 2014 rose 5.7% to $208,100. That level of price appreciation is much steadier than the rapid, 11.5% gain for 2013. In 2015, NAR expects the national median existing-home prices to rise about 5%.

Total existing-home sales for 2015 are forecast to be around 5.25 million, or about 6.4% above 2014. Last year sales finished 2.9% below 2013 levels (5.1 million) at 4.94 million, while prices rose 5.7%.

Pending contracts for existing-homes varied by region in February, with gains in the Midwest and West offset by declines in the Northeast and South. The index tracking pending contracts in the Northeast fell 2.3% in February from January, while the Southern index declined by 1.4%. Meanwhile, the Western region’s index climbed 6.6% in February to its highest level since June 2013, as the Midwest index jumped 11.6% in February.

On a year-over-year basis, all regions of the United States increased contract signings in February: the Northeast by 4.1%, South by 10.8%, Midwest by 13.8%, and West by 18.3%.

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68% of international buyers hail from Latin America, led by Venezuela …

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The Miami skyline

The South Florida real estate market experienced its fourth straight year of record-breaking sales, fueled by a continuing surge of wealthy Latin America buyers, according to a report released Friday, conducted by the National Association of Realtors for the Miami Association of Realtors.

“The difference between Miami today and Miami of a year or two ago is the ultra-high net worth individual,” said Teresa King Kinney, CEO of the Miami Association of Realtors, who presented the report Friday at the Greater Miami Chamber of Commerce’s South Florida Real Estate Summit at Jungle Island.

In Miami-Dade and Broward counties, 68 percent of international buyers hailed from Latin America in 2014, the report shows. Venezuela ranked at the top of the international list, with 16 percent of sales, followed by Argentina with 12 percent, Brazil with 11 percent and Colombia, with 8 percent. Canada came in next with 7 percent, France with 5 percent and Mexico with 4 percent.

For the first time, China appeared on the list, at 2 percent. “China is the No. 1 strongest market for new business from anywhere in the world,” Kinney told The Real Deal. “They are finding us, and they are loving us.”

To further promote Miami, a group of Realtors is going to attend a luxury property show in Beijing next month, she said.

Among international buyers, 28 percent paid more than $500,000 for their properties, and 9 percent paid $1 million or more, the report shows. On average, Miami’s international buyers paid $444,052 per purchase, compared to $245,000 nationally. Brazilians spend the most, Kinney said. Of all international buyers, 72 percent purchased condos; 81 percent of international buyers paid cash.

“International buyers spend more money,” she said. “We love them for so many reasons,” including paying more in property taxes, since they are not eligible for homestead exemptions, and shopping and dining out while on vacation.

In Broward, Canada topped the list of international buyers, at 18 percent, followed by Venezuela, Argentina, Colombia and Brazil.

Overall, Florida led the nation in 2014 with the most international transactions, at 23 percent, followed by California with 14 percent and Texas, with 12 percent. Canada had the highest percent of buyers in Florida, 31.6 percent, followed the United Kingdom, with 7 percent, the report shows. The majority of buyers from those countries choose the Orlando market, Kinney said, because prices are lower. China and Brazil tied for third place, with 5.7 percent, each.

In February, Miami’s median price for single-family homes was up 7.9 percent from February 2014, to $245,000, Kinney said. The median price for condos, $189,000, jumped 8.4 percent, year-over-year. February marked 44 months of sale price increases for condos, and 39 months for single-family homes.

The chamber’s real estate summit, Riding High: The Current State and Future Trends for South Florida’s Real Estate Market, explored the markets for both residential and commercial real estate, and included real estate awards.

Keynote speaker W. Allen Morris, chairman and CEO of The Allen Morris Company, emphasized the need to remember the lessons learned from the previous cycle, take a balanced approach and be able to adapt to change.

Stephen Owens, president of Swire Properties, who was awarded a lifetime achievement award, agreed that balance is important.

“You can’t have a party everyday where everyone is drinking all the time. You have to have a day when you say that I can’t drink today.” he said. “We have a good thing going, but we have to show some discipline going forward.”

Realtor® Associations Honored with NAR Community Outreach Awards

WASHINGTON, March 23, 2015 /PRNewswire/ — The National Association of Realtors® has honored seven local Realtor® associations with NAR Community Outreach Awards. These awards recognize associations that have worked with their communities to make them a better place to live and do business.

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.National Association of Realtors logo

“Realtors® are community leaders and are dedicated to building successful neighborhoods and advocating on behalf of homeowners,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “I am proud to honor the associations that are receiving NAR Community Outreach Awards and, through their work, represent the value Realtors® bring to their neighborhoods and communities.”

This is the first year NAR has honored Realtor® associations with Community Outreach Awards. To be considered for the award, associations must have made use of Realtor® Party Community Outreach resources over a two-year period to address a challenge facing their community; developed partnerships with community stakeholders; or involved the public in a project or discussion to improve the community. The award recipients were announced last week at NAR’s 2015 Association Executives Institute in Vancouver, British Columbia.

The 2015 recipients of NAR Community Outreach Awards are:

Greater San Diego Association of Realtors® (San Diego): SDAR used NAR’s Housing Opportunity grants to conduct multiple public events on a variety of housing issues, such as a re-entry workshop for those individuals who had undergone a short sale or foreclosure.

Richmond Association of Realtors®(Richmond, Va.): RAR used NAR’s Housing Opportunity grants to support collaborative efforts with stakeholders and address a range of housing needs, including hosting a workshop on housing needs and research to help develop a regional housing plan.

Austin Board of Realtors®(Houston): Using an NAR Diversity Grant, the association worked with multicultural groups, community leaders and Realtors® to host a workshop about homeownership challenges facing the African American community to identify and implement local solutions to key issues. 

High Point Regional Association of Realtors® (High Point, N.C.): HPRAR used NAR Smart Growth grants to host a conference to plan for the rehabilitation of two blocks of High Point’s main street and a series of discussions on creating less restrictive codes and regulations for redevelopment areas to help spur innovation and faster redevelopment. 

Charleston Trident Association of Realtors® (Charleston, S.C.): Through an NAR Diversity Grant, CTAR developed a student membership program with local universities to attract younger and more diverse people into the real estate profession. The association also used NAR Housing Opportunity grants to host a series of events for business leaders and other professionals to educate them on housing policy and choices.

Charlotte Regional Realtor®Association (Charlotte, N.C.): NAR’s Housing Opportunity grants help CRRA hold a variety of events for the public and Realtors® to educate them on homeownership topics, and expose them to new neighborhoods and purchase assistance programs specific to the Charlotte area. 

Ada County Association of Realtors® (Boise, Idaho): ACAR used a NAR Diversity grant to support the city’s fair housing efforts and its anti-discrimination ordinance, and a NAR Smart Growth grant to help fund a downtown redevelopment streetscape improvement project.

For additional information on NAR’s community outreach programs and awards, please visit realtoractioncenter.com/community-outreach/.  

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.                      

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website.

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/realtor-associations-honored-with-nar-community-outreach-awards-300054455.html

REALTOR(R) Associations Honored with NAR Community Outreach Awards

The National Association of REALTORS® has honored seven local Realtor® associations with NAR Community Outreach Awards. These awards recognize associations that have worked with their communities to make them a better place to live and do business.

“REALTORS® are community leaders and are dedicated to building successful neighborhoods and advocating on behalf of homeowners,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “I am proud to honor the associations that are receiving NAR Community Outreach Awards and, through their work, represent the value REALTORS®  bring to their neighborhoods and communities.”

This is the first year NAR has honored REALTOR® associations with Community Outreach Awards. To be considered for the award, associations must have made use of REALTOR® Party Community Outreach resources over a two-year period to address a challenge facing their community; developed partnerships with community stakeholders; or involved the public in a project or discussion to improve the community. The award recipients were announced last week at NAR’s 2015 Association Executives Institute in Vancouver, British Columbia.

The 2015 recipients of NAR Community Outreach Awards are:

Greater San Diego Association of REALTORS®(San Diego): SDAR used NAR’s Housing Opportunity grants to conduct multiple public events on a variety of housing issues, such as a re-entry workshop for those individuals who had undergone a short sale or foreclosure.

Richmond Association of REALTORS® (Richmond, Va.): RAR used NAR’s Housing Opportunity grants to support collaborative efforts with stakeholders and address a range of housing needs, including hosting a workshop on housing needs and research to help develop a regional housing plan. 

Austin Board of REALTORS® (Houston): Using an NAR Diversity Grant, the association worked with multicultural groups, community leaders and Realtors® to host a workshop about homeownership challenges facing the African American community to identify and implement local solutions to key issues. 

High Point Regional Association of REALTORS® (High Point, N.C.): HPRAR used NAR Smart Growth grants to host a conference to plan for the rehabilitation of two blocks of High Point’s main street and a series of discussions on creating less restrictive codes and regulations for redevelopment areas to help spur innovation and faster redevelopment. 

Charleston Trident Association of REALTORS® (Charleston, S.C.): Through an NAR Diversity Grant, CTAR developed a student membership program with local universities to attract younger and more diverse people into the real estate profession. The association also used NAR Housing Opportunity grants to host a series of events for business leaders and other professionals to educate them on housing policy and choices.

Charlotte Regional REALTOR® Association (Charlotte, N.C.): NAR’s Housing Opportunity grants help CRRA hold a variety of events for the public and REALTORS® to educate them on homeownership topics, and expose them to new neighborhoods and purchase assistance programs specific to the Charlotte area. 

Ada County Association of REALTORS®(Boise, Idaho): ACAR used a NAR Diversity grant to support the city’s fair housing efforts and its anti-discrimination ordinance, and a NAR Smart Growth grant to help fund a downtown redevelopment streetscape improvement project.

For more information, visit www.realtor.org.

Existing Home Sales Face 2 Major Headwinds in the US

Europe’s Consumer Confidence Rises while China’s Manufacturing Falls (Part 1 of 3)

Existing US home sales edge up in February

Consumer confidence in the Eurozone reached an eight-year high, while China’s manufacturing sector dipped to its 11-month low. The Europe-tracking iShares MSCI EAFE (EFA) gained about 50 basis points, while the China-tracking iShares China Large-Cap (FXI) dipped by 0.32%. Meanwhile, an important housing sector indicator also came out in the US on March 23.

In the US, the National Association of Realtors released its existing home sales figures for February. There was some good news for the housing sector along with investors in the real estate sector—such as those invested in the iShares Dow Jones US Real Estate Index ETF (IYR). Existing home sale in the US (SPY)(IVV) recorded a 4.88 million annualized figure in February versus the 4.82 million recorded in January. The figure, however, came in below median expectations of 4.94 million units. Indicator releases pertaining to the housing market are particularly anticipated by REITs (real estate investment trusts) such as Host Hotels Resorts (HST), General Growth Properties (GGP), and The Macerich Company (MAC).

Home sales face two major headwinds in the US

Taking a look at the trend over the past few months, we see that growth in existing home sales in the US has slowed, especially post–September 2014. On average, existing home sales have met with lackluster demand post-recession. There are two major headwinds to the US housing market’s growth:

1. rising home prices
2. limited supply

The US economy saw investor confidence plummet in its housing market in the wake of the 2009 housing bubble. Investors have yet to establish a good level of confidence in the US housing market. Home prices are still very high, leading to lackluster market demand. Though the rising prices bode well for homeowners, they challenge affordability for prospective homebuyers.

On the supply side, homebuilding hasn’t really picked up at a good pace since the recession. A part of the slowdown in recent months is due to the winter, which hinders construction.

While US real estate investors remain watchful of their holdings, investors in the Eurozone had a definite reason to be happy on March 23. Let’s take a look.

Continue to Part 2

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