It’s recovery time… If it doesn’t get messed up…

by Steve Murray While those in Washington move merrily along trying to correct the housing market, the housing market is doing its best to do that without any help at all. And the help that is now in place (courtesy of Washington) is the kind that we will wish we could FedEx back to them. Markets across the country are beginning to percolate. When the REAL Trends Housing Market Report is released shortly, it will likely show the biggest year over year gain in unit sales in six years. And it will be the seventh month in a row of increased unit sales on a year over year basis, most months in double digits. So what is happening now? You guessed it. Shortages of inventory are popping up all over. Here in Denver overall we have less than two months of homes left to sell at current sales rates and that which we do have is in the higher price brackets which is not where the demand is. We hear the same in nearly a half a dozen markets from every region of the country. How is Washington making this worse? They stuck it to the “big” banks so much so that the rumored millions of foreclosures won’t likely be hitting the streets any time soon. They have so totally scared the appraisal management industry so that there is no real market price mechanism to adjust demand with prices. They have tightened the screws on who can get a mortgage such that investors have a leg up on those families that want to own a home. They have intimidated the mortgage industry about giving mortgages to anyone who can’t prove they can pay it back while also screaming at the same lending institutions for not giving low income families mortgage credit. The list goes on. Just because the Feds and Congress don’t have a tight grip on the residential brokerage business (yet) doesn’t mean they don’t have us all by the throat. They control who, what and how anyone can get credit. They are controlling the prices of homes that need to be financed. They can now exert incredible influence over supply (shadow inventory anyone?). Enough for the rant. As my friend Mike Staver has said, “don’t panic, get back to work”! The great news is thus far it looks like demand is strengthening just as many knew it would as jobs and incomes started to rise again. Americans still prefer to own over renting. Even those who aren’t able to get into ownership now will want to as soon as they can. Hard to believe now that everyone knows housing is a bargain at these prices and these mortgage rates, right? Now is the time. Welcome to spring 2012. The first time we will have a housing comeback without enough inventory at the right price points and with a government controlling the prices of homes that people want. Author Bio: Tracey C. Velt is a writer, blogger and editorial strategist who specializes in the business of real estate. For the past six years, she’s been writing and editing for REAL Trends. Prior to that, she served as an editor for Florida Realtor magazine and continues to contribute to multiple real estate publications, both in print and online.

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