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Housing 'normal' still 2-3 years away - economist

January 29, 2013 @ 7:34 am

The housing market is showing plenty of strength, from sales and price increases to a decrease in foreclosures.

"There are almost no housing market indicators showing weakness," says Mark J. Perry, a professor of economics at the University of Michigan-Flint.

Among the recent bright spots:

  • Existing-home sales jumped more than 9 percent in 2012, the highest level in five years.
  • New-home construction reached a 54-month high in December 2012.
  • The delinquency and foreclosure rate is at its lowest level in four years.
  • A home remodeling index reached 55 in the first quarter of the 2012, the highest reading since 2004 (readings above 50 indicate a growth in remodeling activity.

Still, the housing market is about 52 percent as strong as it was prior to the 2008 housing crash, according to one housing index by Trulia, which factored in data from the National Association of Realtors, U.S. Census construction, and Lender Processing Services.

The housing market faces challenges, such as the number of homeowners still facing negative equity, inventories of for-sale homes remaining constrained, and mortgage credit remaining tight and preventing some buyers from qualifying for a loan.

"At this pace, 'normal' is still two or three years away," says Jed Kolko, Trulia chief economist.

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Comments (5)


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  • Fuego wrote...
    That's what they said..
    January 29, 2013 2:17 pm
    2-3 yrs ago.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • SickofSeattleite wrote...
    so, the govt can artificially inflate the houseing market
    January 30, 2013 5:20 am
    devastating home buyers nation wide with next to no consequences...the home owners get screwed....and now the housing market will get back to "normal" in 2-3 years? I don't thinks so especially not with spendantor Obama ruling our nation into a sea ever never ending debt...watch and see their will be a second wave of foreclosure and disparity.....i don't know where this guy is getting his information but there are dozens of vacant deteriorating homes in my neighborhood and no one is buying.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • rational wrote...
    8th worst
    January 30, 2013 5:40 pm
    WA is ranked 8th worst state for foreclosures in the nation for 2012. But go ahead and cheerlead like it doesn't matter.

    http://finance.yahoo.com/news/chart-top-10-states-foreclosure-080119521.html;_ylt=A2KJjbzc2AlRjWAAWQzQtDMD

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • BeenThere wrote...
    "Normal" means creditors lending to those with less than 20% equity, score under 740 and more people working.
    January 30, 2013 7:59 pm
    Never again will it be the "same". The crash and resulting regulation took care of that. I wonder if he would like to put money down on that 2-3 year time frame.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Rangerhawk wrote...
    It's OK to say it now
    February 3, 2013 9:56 am
    It's 2-3 years away again account of what happened in November.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }