How Much Has the Housing Market Improved? — Dollars and Sense
Seems there’s a bit of a bright spot on the decimated horizon of the real estate market — it looks a lot better than it did a few years ago. But how long before we see a full recovery?
Economist Jed Kolko considered construction starts, existing home sales and the rate of delinquencies and foreclosures to create a housing barometer for real estate website Trulia. He says sales and the foreclosures show consumers’ financial stability and confidence level, while housing starts are a good marker of homebuilder confidence.
Right now, his barometer reveals those metrics are about 34 percent higher than when the market tanked — an 18 percent increase from this time last year. And while that’s good news, improvements at this rate mean we won’t reach full recovery until the end of 2015.
But before you put too much stock in that, he reminds consumers that “full recovery” may not mean a market that looks like it did at the height of the boom. The “new normal” will take into account an increase in people who are too scared to buy, baby boomers who’ve downsized and might prefer renting, and rising gas prices that could make big suburban homes less attractive.