As housing prices continue to drop, real estate experts believe that the housing crisis may not be over even though the economy appears to be attempting a sluggish recovery[1]. In January of this year, residential real estate prices fell 3.1 percent over the year prior, with Phoenix, Minneapolis and Chicago leading the pack with precipitous drops of more than 9 percent in some cases. Analysts believe that the rising tide of foreclosures on the market will continue to swell the backlog of available homes for sale and create downward pressure on the housing market, “probably for the rest of the year,” according to Standard Charter Bank economist David Semmens. Semmens forecast the drop last year, saying that “[prices] won’t turn around until you have consumers feel that housing is genuinely cheap and until they feel a lot more secure in their labor market position.”
Of course, there are also experts out there insisting that single-family home sales are actually on the rise. While national numbers say differently, in isolated markets – Washington D.C. is the most notable but there are others like Knoxville, Tennessee – single-family home sales are headed up. Sales prices in these areas have skyrocketed 19 percent (Knoxville)[2] and D.C. properties have shown 10.7 percent appreciation in the past two years[3]. However, local realtors are confused by some of the numbers, saying “MLS numbers show up and I show down,” and recommending caution to home-buyers looking to invest based on potential appreciation of property.
Do you think that the housing market is on the road to recovery? Are we there yet?
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[1] http://www.investmentnews.com/article/20110403/REG/304039986
[2] http://www.galesburg.com/news/x481347550/Experts-disagree-on-whether-rise-in-single-family-home-sales-indicates-healthy-economy
[3] http://www.hometownannapolis.com/news/hom/2011/04/03-02/The-Realities-of-Real-Estate-Catching-up-on-real-estate-news.html?ne=1
Not even close to a recovery yet! The only way the governement is able to show any recovery at this time, has been to really cook the numbers by excluding things like food, energy (gasoline, diesel prices). Also we are looking at lower unemployment numbers, because people have used up all of their benifits, does not mean they are employed yet!
I know this is the practice, but it is not a very accurate look at what is going on. All the talk things are better is not born out by tax revenues nor domestic production of goods.
As for; “However, local realtors are confused by some of the numbers, saying “MLS numbers show up and I show down,” and recommending caution to home-buyers looking to invest based on potential appreciation of property.”, these are the same lies I have been dealing with for the last several years about the housing market. Interesting now some local Realtors are starting to complain.
People who have lost jobs or had job duties reduced in the last 5 years are at the very least underemployed, and I would love to see stats that illustrate the gap between full employment (under 4% UE) and where we are now. I would bet that they parallel the housing drop. Realtors are generally self-employed, but if one goes from producing at 3 million a year to 1.5 million a year…? hmm… is that not also underemployed? We are in a prolonged corrective state that was predicted back in the late 90s by several economists who saw the changeover from boomer to gen-xers coming. What they didn’t see was the financial meltdown hitting at the same time. We will not come out of this until the government gets true tax reform done ( the FairTax ) and the the lending community gets out of the tight dress they’ve got on right now. Tax reform will bring the jobs back and loosening lenders grip on capital will spur the growth, the new growth that is needed before housing recovers.