Forecasting the easing of the recession has become a bit of a way of life for most business news writers. However, where real estate business is concerned, it appears the "good news" this time is reality. A report last week from the National Association of Realtors (NAR) shows home resales steadily rising, while new home construction steadily climbs from disastrous levels.
A tax incentive aimed at bolstering sales died out earlier this Summer, prompting most experts to forecast gloom and doom for the last quarter of this year. This latest news shows that at worst the market has at least stabilized even without incentive. Of course housing supply and price variables are the prime mover with unemployment and other factors still dismal. Glimmers of hope issued from the US Department of Labor do however indicate the job market my be on the mend too.
On the new construction side of the equation, the chart from Forbes below shows the new home construction index at the other end of the spectrum. If these slightly higher market indicators mean anything, they indicate a level of confidence for 2011.
Regardless of these positive indicators, the real estate market is still one of the hardest hit markets, and it will take time for a full recovery to be achieved. There are between 4.5 and 5 million distressed properties still on the books nation wide - an indicator that "money" has not been overly impressed with price yet. Chief Economist for NAR, Lawrence Yun, had this to say about the recovery so far:
“In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market,” he said. “But further gains are needed to reach normal levels of sales activity.”
The video below from Realtor TV offers still more information and insight into this situation. Most notably Mr. Yun focuses on the job market as the most significant variable where home sale growth is concerned. Logically, people with more income and stability tend to buy houses. An expected increase of 2 million jobs in the country in 2011, combined with only moderate price and interest rate increases, will surely net even more sales next year.