How many articles, blogs, narratives have you seen since 2008 that question or declare that the “US Housing Market Has Bottomed!!”? It seems like every day someone has stuck their neck out only to see it get cut right off. Is this time any different? Is Nick Timiraos of the Wall Street Journal correct in declaring the bottom is in? In a lot of parts of Boston, Cambridge, Somerville, and surrounding towns, the property markets have been getting stronger. What do you see?
WSJ article by Nick Timiraos
July 11th, 2012
There’s a growing consensus that the U.S. housing market, as measured by broad national indicators such as home sales, home construction and prices, has hit bottom. It may not get much better soon, but it probably won’t get much worse, either.
Still, if you’re thinking about buying or selling a home, national indicators may not matter. What’s happening these days in New York may not be happening in Phoenix (for that matter, what’s happening in Manhattan may be totally different from what’s going on in Long Island).
Some very handy interactive charts from Zillow, the real-estate data firm, help drive home this point: the housing recovery is going to be local — and probably hyper-local, at that. As we wrote last month:
While the media are often pressed to generalize about the national market, or to highlight cities that, on the whole, are rising or falling, most real-estate agents will remind buyers that broad housing indexes may not hold much water when it comes to pricing their homes.
Zillow provided data that looks at the share of ZIP Codes within a given market where values are rising or falling. With demand clearly stronger than one year ago, the areas that are doing best are those neighborhoods that have “always had a premium associated with them,” says Stan Humphries, Zillow’s chief economist.
There are exceptions to the micro-recovery thesis. Denver and Phoenix are experiencing price increases in almost every ZIP code. Many parts of the Atlanta metro have seen big price drops over the past three months.
Generally speaking, home prices are rising again in more markets because demand is up strongly from one and two years ago, while the number of homes for sale is down sharply.
Moreover, the share of homes being sold out of foreclosure is down significantly in many markets. That doesn’t mean foreclosures are history. What it does mean is that foreclosures are accounting for a smaller share of all sales. When the “distressed” share of sales drops, prices can rise.
Flip through the charts to see what activity looks like in some of the nation’s largest cities. Remember that prices can be influenced by the mix of what’s selling. These charts show the change in home values, as calculated by Zillow, over a three-month period ending in May.
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