Housing Market Improved “Somewhat”
By Cal Haupt
We’ve all been waiting for the tide to rise. As I wrote in my first column for Thought Leadership, a recession is a cyclical event like the tides in the Low Country of Georgia. When the tides are low you keep your boat in the harbor and make repairs, while waiting for the tide to come in again. According to some recent reports, the tide may slowly be starting to move.
An article in Bloomberg.com states: “After several false starts, housing is flashing the strongest signals yet of a sustainable rebound. While foreclosures continue to depress prices, buyers are wading back into the market, lured by rising employment and record-low mortgage rates. Six years into the biggest real estate collapse since the Great Depression, housing may become a net contributor to the U.S. economy for the first time since 2005.”
An expert at predicting new-home sales, Peter de Bruin, an economist at ABN Amro Group Economics is quoted: “Housing will contribute modestly to recovery this year and we will see a sustained recovery in 2013” that probably will continue through 2015.
A report based on information from the Federal Reserve Board on the 12 Federal Reserve Districts stated, “Residential real estate activity increased modestly in most Districts. Boston, Cleveland, Richmond, Atlanta, Kansas City, and Dallas reported growth in home sales, while New York noted steady to slightly softer home sales…. Contacts in Boston, Philadelphia, Atlanta, and Dallas expect home sales to rise further. … And Boston, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco reported increased multifamily construction activity.
At the end of February, The National Board of Realtors reported that existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve. Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals–pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”
Another good sign is that consumer confidence is increasing and while not all houses on the market are offered at “bargain” prices, there is definitely a large inventory of homes in the affordable range.
The tide appears to be coming in fast—it’s time to wrap up those repairs and loosen the dock lines for a very high tide.