There’s something in the air. Have you noticed it? Downtown is busier, restaurants are crowded and retail sales are up. The same is true in the real estate market. Pending home sales improved in December, marking the fifth gain in the past six months. New home sales are up 17.5 % nationwide according to the Department of Housing and Urban Development.

Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), credits this upswing to affordability, favorable mortgage rates and an improving economy. Yun predicts, “The positive trend is likely to continue in 2011. Current activity suggests a sustainable, healthy volume of a mid-5 million in total home sales for this year.”

The California Association of Realtors reports that sales in December posted a seven-month sales high. Closed escrow sales of existing single-family homes in California totaled a seasonally adjusted annualized rate of 520,680. The statewide median price increased 10.2 percent to reach $302,900 for the year.

Our local market is reflecting this upswing. Builders are starting to build in preparation for sales at higher prices in the year to come. Inflation is a concern that drives some to buy now. By the end of February, more homes will come on the market. The spring season of March, April and May are traditionally very active. Now may be the time to evaluate your options and capitalize on the spring market.

Lenders Can Do More to Spur Growth

In the February 2011 issue of Realtor magazine Lawerence Yun, Chief economist for the National Association of Realtors, expressed that, "Despite concerns about the negative long term effects of federal stimulus efforts - including the impact they will have on the country's huge budget deficit - the US government continues to take action to help spur the economy.  However, the most effective solution for promoting growth, and getting the housing market moving may rest with the banks. Lenders have tightened underwriting so much that even households with solid credit backgrounds are simply not making the cut?  For the past year many lenders have raised minimum qualifying credit scores as high as 640, meaning only households in the upper tier of creditworthiness are getting conventional financing."