Housing recovery gains traction

Comments (4)
Lloyd_L wrote:

The article attributes housing improvement to “slow improvements in the labor market are helping the housing sector recovery gain traction.”

An improving labor market helps but is hardly the only factor that is causing a turnaround in home prices. Here are some more;
1. The pace of foreclosures has slowed and inventories have dropped dramatically in most regions.
2. Prices have dropped dramatically since 2005/2006 making homes more affordable.
3. Interest rates are at historical lows.
4. Rents are rising in most major metropolitan areas.
5. Housing affordability remains high in most areas of the country. In many areas and price ranges it’s even cheaper to buy than to rent.
6. Investors are getting far better returns in housing than they would with the money in the bank. Also, there is upside potential in housing where there is none with their money in the bank.
7. The country’s population continues to increase and yet the rate of new construction has slowed dramatically since 2006. This has helped to absorb the excess housing that was created during the housing bubble.
8. FHA only requires homeowners who have gone through a foreclosure or short sale to wait 3 years before they repurchase. Some of those people are now beginning to purchase again.

Nov 19, 2012 11:55am EST  --  Report as abuse
RynoM wrote:

I’m happy to say we sold our old house earlier this month. It was on the market for two months. We took a shot at it when our renter moved out and we have successfully de-leveraged. To add to Lloyd’s comment: the real estate market isn’t ‘real’ unless mortgages are on par with rents in a given area. Otherwise it’s an overheated market. That’s because rent prices generally reflect the median income of the area.

Nov 19, 2012 1:03pm EST  --  Report as abuse

There are simply too much money in the hands of spectators, state and foreign alike. The real struggling Americans still haven’t recovered, but investors and foreign money are quickly gobblig up good deals and artifically boosting housing price out of reach of middle class Americans.

Nov 19, 2012 1:47pm EST  --  Report as abuse
AlkalineState wrote:

“Over-borrowing, overbuying makes robust return in housing market.”

And all the Quizno’s shift managers go out and buy themselves 4,000 square foot McMansions in the middle of nowhere again. “I might as well do this since gas is cheap…. and the 24-year-old mortgage broker told me I could afford it.”

What could possibly go wrong with numb nutz scenario?

Nov 19, 2012 3:45pm EST  --  Report as abuse
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