The worst of the housing market crisis may be behind us. That is what national housing experts are saying following a series of data reports showing easing price declines in major metro areas, new home sales increasing and California foreclosure rates dropping to pre-crisis figures.
The key indicator may be the slowing foreclosure rate because it is distressed home sales that have been dragging home prices lower.
“The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory,” said Sean O’Toole, chief executive of the firm ForeclosureRadar.com, as quoted in the Los Angeles Times. “If it continues, it will likely mean that we’ve either seen a bottom — or have passed a bottom — in prices because of limited supply and still strong demand.”
Still, the housing market is far from the heights it reached in the middle of last decade. For example, the median-price for a Southern California home was $505,000 in 2007, compared to $280,000 in March 2012.
There is still a lot of recovery to be done before prices and new home construction starts reach earlier levels, but the prevalent theory nationally is that the real estate market is on its way back.
“This is not a robust recovery, but I feel confident that we are not sitting here lingering,” said Ivy Zelman, chief executive of Zelman & Associates, a New York housing research firm. “There really is more meat to the bone.”
Zelman also predicts that home prices will end the year up about 1 percent.