Is The Housing Recovery Really Here?

The New York Times Says — YES!

Announcements of a housing recovery have become a wrongheaded rite of summer, but after several years of false hopes, evidence is accumulating that the optimists may finally be right. The housing market is starting to recover. Prices are rising. Sales are increasing. Home builders are clearing lots and raising frames. Joe Niece, a real estate agent in the Minneapolis suburb of Eden Prairie, said he recently concluded a streak of 13 consecutive bidding wars over homes that his clients wanted to buy. Each sold above the asking price. “I just had a home that wasn’t supposed to go on the market for two weeks sold before it even went on the market,” Mr. Niece said. “It’s definitely a lot different than what we saw” during the last few summers.

The trend is clear in the data. The widely respected S.&P./Case-Shiller index reported recently that sales prices for existing homes rose in April for the first time this year. Several other measures, including a seasonally adjusted version of the index, show that price increases began in February. The pace of housing construction has increased. And the National Association of Realtors reported that pending home sales climbed to the highest level since the end of a federal tax credit for first-time buyers in September 2010.

“All bets are off if anything happens to the economy, but apart from that, I think the fundamentals look better than they’ve looked in 17 or 18 years,” said Richard K. Green, a professor of real estate at the University of Southern California. Professor Green cited the combination of rising rents and low rates on home loans as a powerful inducement to potential buyers, both renters who would prefer to own and investors who want to become landlords. “Compared to a lot of other investments right now this looks pretty good,” he said. Source: The New York Times

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