Housing Market Showing Signs of Progress
According to a recent Reuters article, http://www.reuters.com/article/idUSTRE5BG56P20091218 housing prices in the United States experienced a rise during the third quarter. Given the state of the economy and the housing market over the past couple of years, this is certainly good news, as it ends the two-year downward trend the market had been experiencing over the past two years.
According to an independent study that was conducted by IHS Global Insight, the housing market is now slightly undervalued. In fact, the survey found that prices had increased by 0.2 percent when compared to the second quarter. In California, the quarterly rise was even greater at 2.1%. A separate survey conducted by the Federal Housing Finance Agency reported similar results, stating that housing prices rose by 0.9% for the year-over-year July through September period. This growth represents the first increase posted since the second quarter of 2007, which is when the housing market began its downward spiral.
These recent surveys show hope that the most recent recession, which is considered to be the worst recession the country has experienced in over 70 years, is finally beginning to stabilize. After all, the collapse of the housing market was the primary trigger of the recession. Thanks to the low mortgage rates, low housing prices and government tax credits for homebuyers, however, the market has slowly but surely started to enjoy an upward trend in terms of home sales.
According to the IHS Global Insight survey, which took a closer look at 330 metropolitan areas, determined that, while prices fell in 161 markets, they actually rose in 169. Furthermore, for the first time since the survey started to be conducted in 2005, no metropolitan areas were considered to be "extremely" undervalued.
"For the nation as a whole, the housing market is now slightly undervalued, 8.6 percent when weighted by market value and 10.1 percent when weighted by housing units," IHS Global Insight reported.
Of course, the economy still has a long way to go before a full recovery can be made. Nonetheless, the fact that government initiatives seem to be having an impact on sales and the fact that market is finally starting to experience a rise in prices offers hope that a recovery is near. At the same time, it means there is no longer time to wait for those who have been waiting for prices to bottom out before making a purchase. Simply put, there is truly no better time than now to take advantage of the low housing prices.
Eric Bramlett is the broker & co-owner of One Source Realty, a boutique Austin real estate firm. Eric specializes in downtown Austin real estate and Steiner Ranch real estate.
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