Fortune: Rebound in Housing Market Is Here

Friday, 19 Oct 2012 08:39 AM

By Michael Kling

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The housing market is indeed rebounding. Both sales and housing starts began to rebound last year and have been gathering strength since then, according to Fortune magazine.

The magazine ran a story in the spring of 2011 predicting that housing would soon recover. Many readers doubted that prediction, but Fortune now says its prediction has come to pass.

A shortage of homes on the market, the magazine asserts, is helping both sales and prices.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

A survey by Metrostudy, a housing research firm covering 65 percent of the country, found only 29,400 new homes that were vacant and for sale in July, according to Fortune. Normally, that number should be 100,000. Only 764 new homes were on the market in Las Vegas, compared with 4,867 in 2006.

Mike Castleman, co-founder of Metrostudy, predicts that sales will jump from 149,000 now to 257,000 in 2015, helping to increase prices.

Homebuilders cannot build houses fast enough to meet rising demand. The problem, Castleman says, is the shortage of lots with permits and site work completed.

"The lots in top locations will all be gone by April of next year," he told Fortune.

As for the wave of foreclosures dumping homes on the market, investors are scooping them up and renting them out for big profits.

Fortune's next prediction: Americans will renew their love affair with home ownership with a “burst of enthusiasm.”

Other experts also believe that housing is rebounding. Zillow, a real estate listing and research firm, confirms that housing inventories are tight. That shortage of properties for sale is leading to bidding wars.

The supply of homes for sale as of Sept. 30 was 19.4 percent lower than last year, according to Zillow. The supply of top-tier properties was the tightest — 22 percent lower than last year. The inventory of middle-tier homes was 18.6 percent lower, and inventory for the bottom, 15.3 percent lower.

Some markets did see home supplies increase, but only slightly. For instance, the inventory in Little Rock, Ark., edged up just 0.4 percent, Zillow reports.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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