Please, god: the housing market may be starting to recover.

[Direckshun]

Took us long enough. Jesus.

http://www.nytimes.com/2012/06/28/bu...-way.html?_r=2

After Years of False Hopes, Signs of a Turn in Housing
By BINYAMIN APPELBAUM
Published: June 27, 2012

WASHINGTON — 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.

Like the economic recovery that began three years ago, what happens next is likely to prove a little disappointing. The pace of recovery will probably be slow, and the prices of many homes will continue to decline.

Millions of people remain underwater, owing more on their homes than the homes are worth, and unable to sell. Millions of families still face foreclosure. And a setback in the still-fragile economic recovery could easily reverse the uptick in housing prices, too.

But 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.

“Our sense is that the market is recovering, and we’re extremely confident that it’s not going to get worse,” said Ronnie Morgan, a San Diego real estate professional who recently created a $10 million partnership to buy foreclosed homes. The group, Alegria Real Estate Funds, already has bought about 20 homes in suburban communities, most of which they plan to hold as rental properties.

“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, a major national home builder based in Miami. The company said Wednesday that second-quarter profits were higher than expected, and orders for new homes rose 40 percent.

“I’m a little nervous,” Mr. Miller quickly added in a conference call with analysts, “about saying the word ‘recovery.’ ”

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. 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 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.

But with each passing year, an eventual recovery has grown more likely. Prices have continued to fall, and the economy has continued to recover, a combination that has expanded the pool of potential buyers. The population has continued to grow while few new homes have been built.

Basic indicators of market health that bulged during the bubble, like the ratio of housing prices to income, have returned to more normal levels.

Government efforts to help homeowners have intensified, allowing more borrowers to refinance or avoid foreclosure.

“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.

The influx of investors is a major reason that the market is looking stronger. Mr. Morgan, 56, built apartments before the housing crash. In 2010, seeing a new opportunity, he and some friends started bidding at the foreclosure auctions then held on the steps of the San Diego County Courthouse.

At first they bought properties to renovate and resell. Now they are focused on potential rental properties in the kinds of gated, planned communities in suburban San Diego that once were populated almost exclusively by people who owned their homes. Some of their tenants are former homeowners.

And competition has increased. The auctions were moved from the courthouse steps last year because the crowds had grown too large.

“There’s not a whole lot of other places to put your money,” Mr. Morgan said.

There are still reasons for caution. An unusually warm winter seems to have given a temporary and misleading boost to a range of economic indicators.

The pace of economic growth remains slow and fragile, shadowed by the risk that politicians in Europe and Washington will fail to address looming problems.

And the rise in prices is happening despite the vast number of vacant houses awaiting buyers, up to two million more than the normal level, with several million more houses still at risk of being foreclosed.

But this “shadow inventory” is not distributed uniformly, according to a new analysis by Goldman Sachs. Even within metropolitan areas like Phoenix, the vacant houses are clustered in less desirable neighborhoods, while buyers are seeking homes in areas where there are few vacancies.

Under these circumstances, the researchers concluded, “It is possible for us to see both house price increases and excess housing supply at the same time.”

Indeed, in a growing number of areas demand for homes is outstripping supply.

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.

Mr. Niece, the Minnesota real estate agent, said he and his partner had seen their book of listings decline from about 120 properties to 70 properties, about 45 of which already are under contract.

“I have buyers every single day complaining that they can’t find houses,” he said.

Driving through a neighboring suburb last week, Mr. Niece said that he passed a sign outside another real estate office that read, “The market is great. We’ve sold all of our inventory. We need listings.”

[Brock]

Did we not learn Cramer is a dishonest dipshit?

[alnorth]

As the article hints at, we've had false alarms before. Lets wait until prices continue to climb through August before we uncork the champagne.

[cosmo20002]

Originally Posted by HonestChieffan

Cramer had an interesting take....another reason to not hire and another reason to fire...ouch.

Not sure which is less reliable--a Jim Cramer assertion or an HFC assertion.

[jjjayb]

Originally Posted by cosmo20002

Well, we'll see what we can do to stop that.

/ Republicans

They won't need to. Obama will find a way to screw it up all by himself.

[FD]

Originally Posted by HonestChieffan

And what was decided today that is good for small and medium sized business? The uncertainty was removed and replaced with a certainty that is anti hiring. And now we will have till November to see if this can be removed and that would be a boost.

So the problem isn't uncertainty but new regulations. Thats a fine position, I was just pointing out the problem with the 'uncertainty' canard.

BTW, if the resolution of the uncertainty is so bad for business and our economy, why didn't the stock market tank yesterday? The ruling was a surprise one.

[ChiTown]

Originally Posted by cosmo20002

Well, we'll see what we can do to stop that.

/ Republicans

[LOCOChief]

Unfortunately in most areas values are not on the rise and a large number of agencies REO's are getting ready to hit the market. Most areas throughout the US are still considered "declining markets" according to residential appraisers. New construction appraisal values based on a market approach are coming in well below construction costs. Getting a residential home loan is tougher than it's been in over 20 years thanks in large part to Dodd / Frank which is only about 50% implemented, if it hits 100% we're all hamstrung.
When these waves of REO's hit and spike inventory the current numbers will be revised to something less attractive just like the employment data.

[bsp4444]

Originally Posted by Iz Zat Chew

I have never seen anyone with so much hate in their being. You really should find a therapist.

I guess you've never seen a post from HonestChiefsFAn?

[BIG_DADDY]

Get out while you can. Watch what happens when interest rates go up and they will.

[HonestChieffan]

Inventory has to fall a long ways. Builders currently in KC area are doing ok but only in the 400k up homes. Blue Vally, some Lees Summit, some up north. But the vast majority of homes on the market are in lower than 300k range and that has to move to make a real difference.

To do that people need to be back to work and we see that is not happening. Nor will we see business climate advance till at least past the election. Toss in the increased taxes we may face with the costs associated with ObamaCare if its not overturned and the housing picture is muddy at best with not a broad recovery.

[Great Expectations]

Originally Posted by FD

So the problem isn't uncertainty but new regulations. Thats a fine position, I was just pointing out the problem with the 'uncertainty' canard.

BTW, if the resolution of the uncertainty is so bad for business and our economy, why didn't the stock market tank yesterday? The ruling was a surprise one.

The stock market is more concerned with Europe right now. Ending Obama care would cause another boom. However some parts of the Obama care I really like. Kids should be able to stay on parents insurance, old people should be able to get cancer treatment, people that have had problems before should be able to get insurance again.

[La literatura]

Originally Posted by BIG_DADDY

Get out while you can. Watch what happens when interest rates go up and they will.

Do we have the necessary banking regulations in place to support low interest rates and increasing home prices? I sure hope so. Otherwise, as I understand it, interest rates need to go back up.

[KC native]

I doubt that we are about to start an upswing. We've been getting a floor in prices because banks "voluntarily" stopped foreclosing due to the fraud-closure issues. Well, the foreclosures are starting back up and we still have tremendous amounts of underwater home owners. We probably wonkt go much further down, but there are still too many headwinds to see real price increases.

[KC native]

Originally Posted by Literature

Do we have the necessary banking regulations in place to support low interest rates and increasing home prices? I sure hope so. Otherwise, as I understand it, interest rates need to go back up.

Apples and oranges. Low interest rates alone aren't a problem. Low interest rates, bad regulators, and increased leverage are a problem.

Housing is mostly a supply and demand reationship. When lenders were throwing money around due to low rates, securitization, and general dumbassery that distorted that relationship.

Finally, interest rates do NOT need to go up right now. Inflation is non-existent and deflation is still a near term risk (though much less so than a few years ago).

[FD]

Some positive indicators: