Letter to the Editor: Let's Call it a "Housing Recovery"
A local realtor tells us why it'll be a very long time before the housing market will "bubble" again.
The article addressing the housing market with Danielle Mazza was flawed from the title on.
It will be a VERY long time before the word "bubble" and "real estate" go together again. The appropriate title would have been "Housing Recovery."
Danielle Mazza, quoted in the post, is one of our stellar new agents. She truly has seen the worst of a market and could easily recognize positive signs of improvements. But some readers doubted that, which prompted me to respond, giving a veteran's point of view.
As an agent of 23 years, and the no. 2 selling agent in my office for most of those years, consider my perspective on this question. I have seen both the good and bad markets over that time, and I would hope that experience is what some of the readers were looking for.
The housing market is starting to show positives signs that a RECOVERY is starting. Shorewest Realtors, which has the no. 1 sales record in southeastern Wisconsin, is reporting record breaking web traffic several Sundays in a row now.
Another problem with analyzing today's market is comparing 2011 to 2012. That is like comparing the stock market in 1930 to 1929.
That is the beginning of the home buying process, according to National Association of Realtors, whose yearly study shows that 88 percent of buyers surf the web for about 6-9 months prior to buying a home. Agents are also reporting high attendance at open houses.
This past weekend, I had 12 families through one home in a two hour period. That is an indication that buyers are looking, and ready, or almost ready, to actually BUY a home.
Another problem with analyzing today's market is comparing 2011 to 2012. That is like comparing the stock market in 1930 to 1929. With a horrible year such as 1929, it’s not hard to see better numbers the year following a crash.
If you remember, 2010 was the year that a giant tax credit was given to buyers who closed in the first half of the year. That pushed many of the buyers to buy much sooner in the year leaving very few buyers for the summer and fall. The market fell out after that, so numbers for 2010 were not hard to top in 2011, and now again in 2012.
We are now at the point where homes are priced the same as in 2002.
Now for some cold hard facts.
The number of homes that are selling is increasing. Accepted offers are up 28 percent in December over last December, up 18 percent in January this year over January last year and up 45 percent in February over February last year.
Most prices are not increasing, as there is still too much inventory on the market. Prices are down 6.2 percent since last year, and 9.9 percent since 2007. We are now at the point where homes are priced the same as in 2002. The competition coming from short sales and foreclosures is dragging prices down.
Now that the Home Mortgage Settlement is complete, banks will release more of the foreclosures they were holding back (called Shadow Inventory). Only once the market clears the glut of homes for sale -- whether foreclosures, short sales or regular families trying to sell -- will the inventory even out and prices will stabilize.
The good news is homes are selling -- 12,521 sell EVERY DAY -- we just need even more of them to sell. The web hits and open house traffic indicate buyers are out there looking, and many are buying.
So you can see we have a long, long time, before we will ever say "bubble" again! This year promises to be a great year. Rates remain at an all-time low, and we are close to hitting bottom of the market.
Other opinions that a housing recovery on the way:
“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”
“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”
“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”
“Housing Market and Economy Showing Encouraging Signs.”
The Wall Street Journal:
“From Bottom Up, Signs of Housing Recovery”
“Housing Outlook is More Upbeat”
Pat Tasker, CRS, G.R.I., ABR, SRES