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Letter to the Editor: Let's Call it a "Housing Recovery"

A local realtor tells us why it'll be a very long time before the housing market will "bubble" again.

Dear Editor,

The was flawed from the title on.

It will be a VERY long time before the word "bubble" and "real estate" go together again. The appropriate title would have been "Housing Recovery."

, quoted in the post, is one of our stellar new agents. She truly has seen the worst of a market and could easily recognize positive signs of improvements. But some readers doubted that, which prompted me to respond, giving a veteran's point of view.

As an agent of 23 years, and the no. 2 selling agent in my office for most of those years, consider my perspective on this question. I have seen both the good and bad markets over that time, and I would hope that experience is what some of the readers were looking for.

The housing market is starting to show positives signs that a RECOVERY is starting. Shorewest Realtors, which has the no. 1 sales record in southeastern Wisconsin, is reporting record breaking web traffic several Sundays in a row now.  

Another problem with analyzing today's market is comparing 2011 to 2012. That is like comparing the stock market in 1930 to 1929.

That is the beginning of the home buying process, according to National Association of Realtors, whose yearly study shows that 88 percent of buyers surf the web for about 6-9 months prior to buying a home. Agents are also reporting high attendance at open houses.

This past weekend, I had 12 families through one home in a two hour period. That is an indication that buyers are looking, and ready, or almost ready, to actually BUY a home.

Another problem with analyzing today's market is comparing 2011 to 2012. That is like comparing the stock market in 1930 to 1929. With a horrible year such as 1929, it’s not hard to see better numbers the year following a crash.

If you remember, 2010 was the year that a giant tax credit was given to buyers who closed in the first half of the year. That pushed many of the buyers to buy much sooner in the year leaving very few buyers for the summer and fall. The market fell out after that, so numbers for 2010 were not hard to top in 2011, and now again in 2012.

We are now at the point where homes are priced the same as in 2002.

Now for some cold hard facts.

The number of homes that are selling is increasing. Accepted offers are up 28 percent in December over last December, up 18 percent in January this year over January last year and up 45 percent in February over February last year.  

Most prices are not increasing, as there is still too much inventory on the market. Prices are down 6.2 percent since last year, and 9.9 percent since 2007. We are now at the point where homes are priced the same as in 2002. The competition coming from short sales and foreclosures is dragging prices down.

Now that the Home Mortgage Settlement is complete, banks will release more of the foreclosures they were holding back (called Shadow Inventory). Only once the market clears the glut of homes for sale -- whether foreclosures, short sales or regular families trying to sell -- will the inventory even out and prices will stabilize.

The good news is homes are selling -- 12,521 sell EVERY DAY -- we just need even more of them to sell. The web hits and open house traffic indicate buyers are out there looking, and many are buying.

So you can see we have a long, long time, before we will ever say "bubble" again! This year promises to be a great year. Rates remain at an all-time low, and we are close to hitting bottom of the market.

Other opinions that a housing recovery on the way:

CoreLogic:

“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.”

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”

Sincerely, 

Pat Tasker, CRS, G.R.I., ABR, SRES
Shorewest Realtors

Sarah Wonderiling March 06, 2012 at 02:00 AM
Again clearly you do not understand the primary cause of the markets slowness to recovery. Yes, rates are at an all time low. And yes there is, and will always will be sales in the real estate market. But, the over riding issue is the complete lack of buy confidence in the job market. You and your Realtors cannot fix this. But you continue to spread your false information to the unsuspecting masses. Well, we ain't buying your rubbish. So, as many of your co workers drop out of real estate, you will be once again having to ask...did you want fries with that?
Clark March 06, 2012 at 03:14 AM
It's all political. The Democrats want you to believe the economy is better(stock market at 13,000), the housing market is 'recovering', and we're creating jobs. Reality check- our national debt is out of hand, home foreclosures were up again last month, and there are millions without jobs! Give tax cuts to small businesses so they hire people. That way you have more people paying into the system. I learned that in Econ 101. Maybe Obama should go back to the basics. Hope and change....my donkey!!!
Born Free March 06, 2012 at 03:27 AM
Ditto's, Sarah. I've been in new home construction from the bottom up since 1974 and have never seen the housing market this bad for this long. Carter screwed up the market pretty bad with mega high interest rates but nothing like this. In fact, the National Realtors Association threw it's hat in with the Democrats in '08. People can tour homes till the cows come home but that doesn't pay the bills - - money talks. More people willl be out looking this spring but that's what people do when the weather warms up. Sales of existing homes is not indicative of positive growth when new construction is dead and not even factored. Turning over existing home's does just a tad more then nothing for the economy other then feed the realtors and banks. The true housing market indicator that actually means something valuable relative to economic growth is in the area of new construction. New buildings of course are 100% new products bought from dozens and dozens of manufactuers (employers) nation wide and every new structure that is built is built by craftsmen and machines/tools, oh and insurance coverages. If applicable one can add in the land developers contribution to the factor too. Housing bubble? That phrase deserves some careful scrutiny.
Craig March 06, 2012 at 04:30 AM
I agree. Lets not forget the existing home sales are at fire sale prices. Very little sales[wo]manship is needed when you are giving something away! Many of these are bank owned homes, and banks are sick of paying the utilities, snow removal, hazard insurance, and repairs on these houses. They are finally willing to drop the price to dump the dumps.

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