The timing of a housing recovery has been debated from the bulls and bears for several years now and evidence is accumulating that the optimists may finally be right.
Melissa S, a real estate agent in Orlando Florida, said she recently concluded a streak of 7 consecutive bidding wars over homes that she has listed. Each sold above the asking price.
“I just had a home listed in Orlando, Florida that immediately instigated a bidding war and contracted for $4000 above the listing price,” Melissa said. “It’s definitely a lot different than what we saw” during the last few summers.
Roughly six years after the housing market began its longest and deepest slide since the Great Depression, a growing number of experts and people who actually put money into housing believe the end has come.
“It feels very much like we’ve hit a bottom and we’re starting to come off of that bottom,” said Stuart Miller, chief executive of Lennar, during the companies second-quarter conference call on Wednesday.
The trend is clear in the data. The widely respected S.&P./Case-Shiller index reported earlier this week that sales prices for existing homes rose in April for the first time this year. The pace of housing construction has increased. And the National Association of Realtors said Wednesday that pending home sales climbed to the highest level since the end of a federal tax credit for first-time buyers in September 2010.
This is the fourth consecutive year that the housing market has shown signs of revival, and each previous episode ended with prices renewing their downward slide.
“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 mortgage rates 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.
In a growing number of areas demand for homes is outstripping supply. Under these circumstances, it is possible for us to see both house price increases and excess housing supply at the same time.
The number of homes for sale has been falling for more than a year, according to the National Association of Realtors. Some owners are waiting for prices to rise; some of them must wait because they are underwater.
Clearly, the worst in housing is over, which means do not wait too long before taking advantage of what the market is providing…low mortgage rates, great prices and a safety net.
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