Tags: housing | market | boom | bust

NYT: Housing Market Going from Bust to Boom in a Hurry

Friday, 22 Mar 2013 08:08 AM

By Dan Weil

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After its terrible crash during the 2008-09 financial crisis and several years of sluggishness afterward, the housing market is rebounding with a bang.

The bust helped push inventory levels down, and now demand is snapping back as the economy recovers, creating an imbalance in supply and demand, The New York Times reports.

The number of homes for sale across the country is at its lowest level since 1999, according to the National Association of Realtors.

Editor's Note:
Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

In the Sacramento, Calif., metropolitan area, a prominent location in the boom-bust cycle, home listings plunged 60 percent in January from a year earlier, compared with a 23-percent decline for the country as a whole, according to Zillow.

Meanwhile, Sacramento has seen a 15 percent jump in its median homes sales price over the past year. Nationally, the S&P/Case-Shiller index of home prices soared 6.8 percent in December from a year earlier, the biggest increase in almost 6 ½ years.

“In my 27 years I’ve never seen inventories this low,” Kurt Colgan, a broker with Lyon Real Estate in the Sacramento area, tells The Times. “I’ve also never seen a market turn so quickly.”

To be sure, not all experts have gone gonzo for housing. Include Yale economist Robert Shiller among the cautious.

“Like any other speculative market, housing is hard to predict,” he tells Yahoo. “In the short run, I think we’ll go up for some months. But to go out a year, or people want to know 10 years out, it’s a great unknown.”

Over the last 50 years, home prices have become more volatile, as homes turn into “more of a speculative asset,” Shiller says.

“People shouldn’t assume the housing market is off to the races and you’re going to regret it if you don’t go in,” he says.

"[For] the country as a whole it’s rather unlikely that we’ll have another boom like the one we recently had because that's such a rare and unusual event. . . . Prices could well go down. It’s a risk.”

Editor's Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

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