The real estate market is thawing this spring. Following five years of dismal sales and falling prices, the housing market is starting to see a turnaround, according to housing surveys, agent reports, and economists.
Home buyers are returning to take advantage of record housing affordability while investors are buying up foreclosures in bulk at bargain prices.
"The biggest challenge that we’ve had over the past four years is fear — fear that the economy is collapsing, that property values are collapsing, that the world is coming to an end," Mark Prather, a broker at ERA Buy America Real Estate in La Palma, Calif., told the Associated Press. "The fear factor is all but gone."
The signs are already there: Home sales prices are starting to edge up, even in hard-hit housing areas like Phoenix and Miami. Also, banks are issuing more mortgages. JPMorgan Chase recently reported an uptick in loan applications recently by 33 percent, and the bank said that it issued 6 percent more mortgages from January through March than last year. Wells Fargo reported an 84 percent increase in loan applications and the issuing of 54 percent more mortgages in the last year.
Still, the housing market has some ways to go, with a surge of foreclosures expected to soon hit the market and the unemployment rate still high in many parts of the country.
"This gradual healing is encouraging, but we must tread carefully as the housing market is still far from a robust recovery," Michelle Meyer, an economist at Bank of America Merrill Lynch, told Reuters News.
Source: “US home-buying season finally signaling a recovery,” The Associated Press (April 15, 2012) and “Close to Bottoming, Home Prices May Rise in 2013,” Reuters (April 12, 2012)