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Signs Of A Turnaround In The Housing Market ?

by @ 12:57 pm on August 25, 2009. Filed under Credit Crisis, Economics, Real Estate, Sub-Prime Mortgage Crisis

For the first time in two years, home values have actually increased:

NEW YORK – A closely watched index shows home prices posted their first quarterly increase in three years, signaling the housing market has turned a corner.

The Standard & Poor’s/Case-Shiller’s U.S. National Home Price Index released Tuesday rose nearly 3 percent from the first quarter, though was still down almost 15 percent from the second quarter last year.

Home prices are at levels not seen since early 2003. Prices have fallen 30 percent from the peak in the second quarter of 2006.

Is this the first step in a turnaround, or just a temporary uptick ?

At this point, it’s way too early to tell but I’ll take whatever good news I can get.

2 Responses to “Signs Of A Turnaround In The Housing Market ?”

  1. LittleDavid says:

    Some analysis I have read is that the increase is only due to the $8k tax credit for first time home purchasers.

    So the question is: can the uptick be maintained without continued deficit spending on the part of the government?

    I am moderately hopeful that the economy has turned the corner. That the end of this recession, just like previous recessions, will be motivated by the private economy.

    One thing I think I can personally point to is: all these first time home buyers are being forced to provide proof of income and their credit ratings are checked closely. While tax credits are being offered to first time home buyers, those unworthy of the credit are not getting the loans.

  2. Deane says:

    Home sales under $100 are up dramatically from the 8K tax credit plus investors gobbling up “houses on sale”. The sale of houses between 100K and 250K is up slightly while the sale of houses over $250,000 is still down. I think any improvement we see is artificially induced and not indicative of a genuine turnaround.

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