Existing and new home sales bumped up in February, but I don’t call that a recovery by far.
One month does not a trend make. More encouraging is news from the battlefields of California, Nevada and Arizona.
Sales there are way up, with homes at the lower end of the price spectrum getting multiple offers, in some cases.
In Phoenix, which has one of the highest foreclosure rates in the country, home sales soared in March to levels not seen since 2005.
Foreclosures fell a bit, but that could be due to several bank moratoria.
Sales have been up in Las Vegas as well, and some of the hardest hit areas of California are selling too.
My major concern with California is that sales surged in the fall, mostly of foreclosed properties, and now they’re falling again; that is likely due to huge job losses in the state.
So why am I slightly optimistic? Sentiment. Housing is largely driven by consumer sentiment; it is, after all, one of the most emotional (not to mention expensive) purchase for any individual or family. Buyers are definitely out, not just kicking the tires, but signing on the dotted line as well.
A few homes that were sitting around for months and months here in the DC area, suddenly sported “Under Contract” signs this weekend.
I’m also seeing rising inventory, which means discretionary sellers may be testing the waters as well.
I’m not saying it’s all over, because we’re far from that. Most experts I talk to say they don’t expect to see prices level off until 2010, but sales usually lead prices, at least they did on the way down.
They key will be foreclosures. If the Obama administration’s modification plan really shows some good numbers, and banks really put their money where their PR machines are, then the inventory numbers will start to come down.
That would be the truest sign of recovery in housing.
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