New home sales increased month-over-month by 15.6% in January, 2013, with average prices spiking higher by 6.8%. These numbers surprised virtually all analysts, with the most aggressive prediction out of Wall Street or the usual housing sources calling for increases at half these levels.
There is nothing in these numbers which indicates one-time factors having any undue influence on results. In fact, the increases are consistent with predictions made in these pages and in the RayMaxTeam web site that housing prices would surge much more than expected in late-2012 and the first half of 2013. Not only am I not surprised by the strength in this report, I expect the rate of increase to continue to surge.
Only a salmon would be comfortable fighting this tide, which clearly points to a further housing recovery and higher prices in the Northern Virginia market. Ben Bernanke made it abundantly clear again today that he will keep his foot on the economic accelerator and keep interest rates on those things he can control at record lows for the foreseeable future. There will be abundant warning signals when the housing recovery appears to be slowing; those signals are not in view at this time.
Ray Wedell, CFA