Sales of existing homes rose slightly in March, marking the sixth consecutive monthly rise for existing home sales in the last eight months, the National Association of REALTORS reported Wednesday.

“We’re clearly on a recovery path,” says Lawrence Yun, NAR chief economist.

Existing home sales rose 3.7 percent in March from February, as distressed sales, such as those in foreclosure, continued to make up a big bulk of home sales (40 percent of all purchases).

“At this point, we’re likely to see a steady improvement in sales,” says economist Joel Naroff of Naroff Economic Advisors.

So just in time for the spring buying season, here’s what economists have to say about who’s buying and currently driving the market:

Investors: All-cash deals last month made up a record number of sales, accounting for 35 percent of all resold homes. Investors continue to make up a big part of those cash deals. Investors are buying distressed homes and flipping them for a slight profit or turning them into rentals, says Patrick Newport, economist at IHS Global Insight.

Luxury consumers: Some real estate professionals are reporting a pick up in luxury markets in some cities too. “The confidence is back in the market,” says Neil Palmer, CEO at Christie’s International Real Estate.

Foreign buyers: Coastal markets, in particular, are seeing a surge of foreign buyers, such as in New York, Palm Beach, Fla., and San Francisco, AOL Real Estate news reports.

Traditional buyers: Traditional buyers are also re-emerging. Mortgage applications to buy homes rose 10 percent over a seven-week period, according to the Mortgage Bankers Association’s most recent report. “This pickup in demand should show up in improved existing home sales in April and May, unless lending conditions tighten,” Newport says.

The market is making “slow, steady progress” and demand in housing is rising even with higher mortgage rates “so that’s encouraging,” Pierre Ellis, an economist at Decision Economics in New York, told The New York Times.

“It’s the new financial psychology,” says Jarvis Slade Jr., Christie’s managing director for the Americas. “We’ve had two years of hesitation, the sellers are realistic, the buyers confident and cautious, but Americans are starting to feel better.”

Source: “Rising home sales point to a recovery; Prices expected to keep falling 5% to 7% this year,” USA Today

Using data from Moody’s Economy.com, Forbes identified the top-10 states where more residents are leaving than arriving.

The factors that encourage outbound migration from these states are mostly economic — high employment and high cost of living — although both Louisiana and Mississippi have been affected by natural disasters.

The 10 states that have said goodbye to the most residents are:

1. New York
2. Illinois
3. Ohio
4. Nebraska
5. Kansas
6. Iowa
7. Louisiana
8. North Dakota
9. South Dakota
10. Mississippi

Source: Forbes, Jenna Goudreau (12/08/2010)

1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.

2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.

3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.

4. There are 81 million “Echo Boomers” who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.

5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).

6. Make room for the “Sandwich Generation” – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.

7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.

Source: ProSalesOnline.com (October 2010)

Some 52 percent of single home buyers in April chose suburban locations over urban and rural areas, according to a survey by Coldwell Banker of 1,000 single buyers.

· More than 53 percent of single home owners reported that they purchased a home because it was more cost effective than renting in their area, while 68 percent of single home owners purchased a home that was less expensive than they believed they could have afforded to pay.

· Some 55 percent have less than a 30-minute commute to their office or work from home.

· Singles don’t shy away from foreclosures – especially single men. Thirty-eight percent would currently consider purchasing a foreclosed/short sale home, compared to 29 percent of single women.

· Of the 13 percent of single home owners who own their home jointly with another person, 49 percent made the purchase with their parents. Forty percent live less than 30 minutes or even in the same neighborhood as their parents or extended family. An additional 12 percent live with at least one family member.

· Number of bedrooms is important to 27 percent of single women, while only 18 percent of men were concerned.

Anyone trying to rent or sell a property on the Gulf Coast should keep these issues in mind.

• Don’t panic. The next few months could be difficult, but this too shall pass.
• Be forthright. Address the issues on your Web site and on the Web site for your client’s property. Say something like, “We know you’re concerned about the oil spill; we are too.” Add links to reliable news stories and blogs.
• Take pictures. Date-stamped photos of clean water may reassure would-be buyers and renters.
• Focus on non-beach attractions. Golf courses, shopping, and theaters are important and unaffected assets.
• Be prepared to negotiate. Bad news brings out bargain hunters.
• Document losses. Help sellers by providing a broker’s price opinion to serve as a baseline should property values decline, and pursue compensation from the government or BP.

Some experts are saying that the next big real estate problem could be a shortage of homes.

Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

“The decline in household formation is artificial,” says James Gaines, a real estate economist with Texas A&M. “The young are moving in with their parents. There’s even doubling up among working-class people. There’s a pent-up demand coming if and when the economy recovers.”

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.

Some recovery in the labor market and record low mortgage rates could help offset some of the pressures on the housing market, according to a new study released by the Joint Center for Housing Studies at Harvard University.

“Right now, economists expect the unemployment rate to stay high, but if employment growth surprises on the upside or downside, housing numbers could too,” Eric Belsky, executive director of the center, said in a statement.

Home owners’ level of debt relative to equity stood at a record 163 percent at the beginning of the year, and housing costs have become a severe burden for more borrowers, the center adds.

Economists speaking at the recent annual meeting of the National Association of Real Estate Editors said the housing market likely will not recover until 2013.

Stan Humphries, Zillow chief economist, said home prices continue to decrease, and he sees the “tremendous amount of shadow inventory” delaying recovery. “We think the market will be flat in nominal terms for three to five years,” remarked Humphries. “We are not going to hit bottom and see a V-shaped recovery.”

Meanwhile, Fannie Mae chief economist Doug Duncan said it will be another three years before new household formation and housing starts pick up. Duncan believes home prices will fall another 1 percent to 3 percent before bottoming out in the third quarter.

Both Humphries and Duncan said the federal home buyer tax credits shifted demand so that buyers took action earlier than they would have otherwise. “We’re going to see a payback in July and August,” noted Humphries.

More than 76 percent of people say they would prefer to rent a home than buy one, up 5 percent from 2009, according to this year’s survey from the National Apartment Association.

The survey also calculated that 60 percent of renters plan to continue renting in 2011, with only 12 percent planning to buy a home in the next year.

Some 64 percent of renters cited having no responsibility for major repairs or maintenance as the primary reason they prefer to rent, followed by 33 percent who cited not being impacted by an unpredictable real estate market or susceptible to foreclosure.

Convenient and comfortable laundry rooms are an increasingly popular feature among home buyers.

Tom Byrne, president of Rockville, Md.-based Chadsworth Homes Inc., says they are more popular than such features as studies and media rooms.

“In the past few years, 30 percent of the homes we build … have a laundry room with granite countertops, a single-level kitchen-style faucet, and the laundry tub will be an undercounter sink,” Byrne says.

Stephen Melman, director of economic services for the National Association of Home Builders, concurs.

“These rooms are becoming larger and more multifunctional, with organizers, a table for folding, ironing stations, and windows with a view,” Melman says.