Boom2Bust.com

What Housing Bust?

Lately, I’ve noticed the desperation permeating the U.S housing market has given way to a bit of optimism. Case in point, according to a Reuters/Zogby poll released yesterday, a majority of Americans think now is a good time to buy a home. The survey of 1,049 likely voters revealed that 53.8% thought that now was a good buying opportunity. 41.6% said it was not a good time to buy, and the rest were unsure. The poll, conducted April 10 to 12, had a margin of error of plus or minus 3.1 percentage points. Reuters noted:

While economists said it was unlikely the housing market had reached a bottom, some have grown cautiously optimistic that it was finally nearing the end of its slump.

Reuters’ Lynn Adler wrote a piece today that echoed such sentiment. According to Adler:

While the data says “no end in sight” for the housing crisis, real estate agents are beginning to see signs of life among people looking for homes to buy around the United States.

It’s too early to talk of a trend, but lower house prices and mortgage rates are bringing buyers out of hibernation, at least in some markets. Provided sellers are prepared to cut prices, buyers are willing to bid, real estate agents say.

“If you’re not going for pie-in-the-sky type of numbers and price your house accordingly, I think that they’ll go pretty quickly,” said Victoria Hanbury Howard, a real estate broker at Coldwell Banker in Washington.

Brokers report the same story in several other places, according to real estate companies with a wide reach like RE/MAX International Inc and Coldwell Banker Real Estate LLC.

If this anecdotal evidence proves durable, it could mark a turnaround from one of the worst downturns in the housing market in a century.

As further “evidence” of a changing outlook, Paul Kelma of the Suburban Chicago News wrote yesterday:

Today might be an ideal time to buy a home.

Bill Basic has seen this time come around maybe three times in the past 25 years.

The long time homebuilder and president of the SouthWest Suburban Homebuilders Association ticks off the key points…

It is THE single biggest wish in the American dream of home ownership: the “buyer’s market.”

Basic saw those conditions in 1983-86 and again in 1989-91, first when the market stalled during the presidency of Jimmy Carter, with interest rates near 22 percent, and again during the first Gulf War.

After each, pent-up buyer demand, dropping interest rates, too much inventory and stable prices opened the floodgates of a home buying upturn. He sees the pre-conditions for that kind of upturn right now.

And once it starts — and it will, with growing population and pent-up demand — prices will rise and the buyer’s market will be history.

“The time to buy is now. A lot of people are ‘down’ on housing and the (economic) times, but you can always find some bitterness. People who sit on the sidelines … if they’re going to sit on the fence, they’re going to be kicking themselves,” he said. “Once that inventory is down, you will see prices rise.”

Lynne Austin, president of the Home Builders Association of Greater Fox Valley, said the “kick” will come when a buyer sees other people living in “their” home.

Wow. With housing’s future so bright, there should be no need for a mortgage bailout, right?

Sources:

“Americans see buying opportunity in housing: poll”
Reuters, April 16, 2008

“Brokers feel a pulse in home market”
Lynn Adler
Reuters, April 16, 2008

“This may be the moment to seize”
Paul Kelma
Suburban Chicago News, April 15, 2008