The Housing Market: Better Than It Looks and Still Improving

June 01, 2012 / Russell Legato, Residential Property Analyst

For the past five years the housing market has been in a slump. Now, the words, housing market: better than it looks, applies to the real estate industry. In some areas it is better than others. There are some cities where a large number of foreclosed properties are available, keeping prices low for those sales that are not foreclosures.

The Housing Market: Better Than It Looks and Still Improving

In March the listing prices increased by 1 percent in some areas. In others, they decreased. Atlanta saw a 4 percent decrease. Overall, the industry is predicting continued improvement in listing and selling prices. The glut of foreclosed properties available on the market continues to be a problem.

Twenty cities saw a reduction in prices. In addition to Atlanta, they are Boston, Chicago, Cleveland, Las Vegas, Los Angeles, New York, Portland, San Diego, San Francisco, Seattle, Tampa and Washington D.C.  It seems to conflict with other reports of a positive recovery. The Case-Shiller report includes distressed properties in their statistics.

The difference is that sub-prime loans are included by the Case-Shiller report and other reports rely only on the home sales backed by prime financing.

Statistics based on some federal agencies have been extremely favorable and indicative of a growing recovery in the housing market. Prime lending rates are superior to sub-prime rates, which are less than optimal. Another reason for the difference in results is that only single family homes are factored into the statistics. Duplexes are not.

The Case Shiller indices have risen in the last month although the increase is very slight. Since depressed homes are included, this is a positive sign. If it rises in the next two months, however slight the increase, homebuilders expect new building starts to pick up considerably. A financial advisor would advise people to consider foreclosed properties first due to the low prices. That may be wonderfully advantageous for the buyer. However, it will add to the damage inflicted on the housing market and the real estate industry at large.

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