Yesterday my phone started ringing after an article in the Wall Street Journal announced that the housing crisis was over. Is it true? What do you think? Should I buy a home now? What can I get a 3 bedroom home for in Phoenix? Two emails followed from clients who had taken their homes off the market at the beginning of the year inquiring about the listing inventory, which is also slowly declining.
The article, The Housing Crisis is Over?, from the Wall Street Journal, reports that Cyril Moulle-Bertaux suggests that April 2008 marked the bottom of the U.S. housing market. And in his R.O.I. column WSJ's Brett Arends makes a similar argument. He looks at the data on housing starts since 1972, which shows that new housing starts slumped below the one million mark in March. Every time that has happened in the last 50 years, Mr. Arends writes, it proved to be the bottom of a recession. Mr. Arends points out that Bill Wheaton, a legendary real-estate professor at the Massachusetts Institute of Technology, has also suggested that fears about the real-estate crash were overdone. And he points to a private portfolio manager in London, who said the homebuilding stocks on Wall Street were at last a "buy." In the Journal editorial, Mr. Moulle-Bertaux suggests that the housing market will revive, as more first-time buyers are lured in by falling prices and lower mortgage rates. "Homes on average are back to being as affordable as during the best of times in the 1990s," he writes. "Numerous households that had been priced out of the market can now afford to get in."
Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."
SO DO WE BELIEVE IT? Thats what my clients were asking me. All I can tell you is what I have seen and heard.
1. My listings are showing now more than they did a month ago
2. A lender told me yesterday he has clients pre-qualified that have not been able to secure a property due to multiple offers
3. A home inspector told me yesterday that he has clients who have him waiting to do an inspection but they too are losing out to multiple offers.
4. Obtaining an FHA loan still seems to take forever, and availability of funds is still difficult.
SO WHAT I READ AND WHAT I HEAR, AND WHAT I AM EXPERIENCING ALL SUPPORT EACH OTHER
My feeling is that if your were waiting for the bottom to hit, your wait might be over. I dont expect a dramatic increase in activity but a slow and steady climb. I know there will be naysayers, but there does seem to be some statistics to back up these claims. Homes sales in the Phoenix market have been rising since February. If the homes that are currently pending a close of escrow do indeed close, then April and May look good as well.
So now the question will be, how long will we ride the bottom, before the next upswing? Wait a minute, let me get my crystal ball.
For more about Homes in Phoenix and the Market
Comments(9)