Is the Housing Crisis Over? Some say “YES!”
An article in the Wall Street Journal today (read it here) claims it’s ‘very likely’ that April marked the bottom of the US housing market.
The article contends that our market is at or near all-time lows in several key categories so that the main ingredient in a healthy market, affordability, is back.
The correction means that it NOW takes a only 19% of a family’s household income to pay an average mortgage than it did just a few years ago, when it rose to 25%, causing many people to avoid buying homes. People that could not afford a home 3 years ago are suddenly able to consider purchasing.
With affordability and low interest rates, the article asserts, the market will begin a slow upward correction.
The article further points to historical market trends that show inventories begin to decline within 2 months of the bottoming of the market. The assumption here, of course, is that our market has bottomed out.
Well, has our market bottomed out? Is the housing crisis over? I have not researched enough recently to support my position, but from my vantage point as a busy, full-time Realtor, our market has picked up over the past 2 months. Phoenix real estate and Scottsdale real estate, in particular appear, to be turning over more quickly. As mentioned in another recent post, we’ve been involved in several multiple bid situations in recent weeks and investors are returning en masse to our market.
I believe a return to even modest appreciation levels of 4-6% per year, are still 18-24 months off, possibly more. However, I believe we will see prices hold steady and begin to slowly appreciate in the near term.