Economists: Housing Recovery Finally Here

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By Chris Isidore

It's been a long time coming, but economists surveyed by CNNMoney believe the nation's housing market has finally turned the corner.

Of the 14 economists who answered questions about home prices in the survey, nine believe that prices have already turned higher or will make that turn later this year. Only three months ago, half of the economists surveyed by CNNMoney believed a turnaround in prices would not take place until 2013 or later.

Economists have been encouraged by a variety of readings, including three straight months of increases in the S&P/Case-Shiller home price index, a pick-up in sales of existing homes and home construction and a big jump in the price of new home sales.

Mortgage rates are also likely to remain near record lows thanks to the Federal Reserve's purchase of $40 billion in mortgages a month for the foreseeable future.

"We're seeing the signs of a pulse in a sector that has been flat-lined for a number of years," said Sean Snaith, economics professor at the University of Central Florida.

Determining when the housing market has turned the corner is important for more than home builders and real estate agents. Even before soaring foreclosures sparked a meltdown in financial markets in 2008, the housing market had become a significant drag on the economy. Housing continued to subtract from the nation's gross domestic product right up through early 2011.

But starting in the fourth quarter of last year, housing has been adding to growth. Lynn Reaser, chief economist for Point Loma Nazarene University, said housing is now bucking the trend in what is otherwise a sluggish U.S. economy.

Still, economists don't believe housing is ready to be a major driver of economic growth, as it was during the housing boom and some earlier economic recoveries. But housing could keep the economy moving in the right direction.

Some of the economists surveyed said they believe there's been some fundamental change of thinking in the market place. Buyers who had postponed housing purchases while prices slid are finally more comfortable making the plunge.

"You had a lot of people with what they needed to buy homes -- jobs, decent credit scores -- who were on the sidelines. All they needed to do is wait for their confidence to rebuild," said David Crowe, chief economist for the National Association of Home Builders.

Reaser said that that change in attitude is a key to the market turnaround.

"The firming in home prices might be feeding on itself," she said. "You've got buyers not wanting to miss the bottom of home prices and mortgage rates."

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Economists: Housing Recovery Finally Here

Homes are selling faster in the majority of U.S. markets than they were a year ago, according to data recently released by Realtor.com. Ten areas in particular are sweet spots if you're selling a home.

The metropolitan areas on this list of the cities where homes sell the fastest tend to be in states that have been hardest hit by the economic downturn. Five of the metropolitan areas are in California.

Click through the gallery to find out where homesellers have the best shot at getting their house sold -- and fast.

Read more at 24/7 Wall St.

Photo: Flickr/dherrera_96

Average number of days homes spend on market: 48
Median home price: $185,000 (73rd highest)
Population: 4,192,887 (20th highest)
Unemployment: 7.72% (65th highest)

The entire metropolitan area of Phoenix-Mesa, which has a population of more than 4 million, had 13,912 homes listed on the market in June -- the 20th highest of all the metropolitan areas surveyed. This is a drop of almost 40 percent since the same time last year. Speedy home-selling may be boosting the housing market in the Phoenix area.

Read more at 24/7 Wall St.

Find homes for sale and for rent in the Phoenix area.


Photo: Flickr/humbertomoreno

Average number of days on market: 47
Median home price: $99,000 (the lowest)
Population: 4,296,250 (18th highest)
Unemployment: 11.21% (ninth highest)

Unlike many of the metropolitan areas on the list with high home values, in Detroit, there are many bargains to go around for homebuyers. Of the 146 regions surveyed by Realtor.com, only Detroit had a median home value below $100,000 last month. Housing prices in the area did not manage to crack through the six-figure ceiling despite increasing 10 percent from last year, a much higher rate than the national average of 2.68 percent increase. This has sparked much interest among buyers.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Detroit.


Photo: Flickr/Bernt Rostad

Average number of days on market: 45
Median home price: $549,000 (third highest)
Population: 1,836,911 (39th highest)
Unemployment: 8.89% (34th highest)

California was hit hard during the housing downturn, and San Jose has been no exception. From the first quarter of 2007 to the fourth quarter of 2011, home prices plunged 32.9 percent. Nevertheless, the median price of one of the 3,621 houses listed is still an impressive $549,000, the second highest of all home prices on the list and the third highest of all metropolitan areas surveyed. Buyers should not dawdle either.

Read more at 24/7 Wall St.

Find homes for sale and for rent in San Jose, Calif.


Photo: Flickr/the_tahoe_guy

Average number of days on market: 45
Median home price: $725,000 (the highest)
Population: 4,335,391 (17th highest)
Unemployment: 7.52% (68th lowest)

While Detroit’s median home listing price is less than $100,000, the median home price of $725,000 in the San Francisco area is the highest measured in the Realtor.com report. Yet, despite the high prices of homes, there isn't too much idle time on the market, as the average home is sold in 45 days.

Read more at 24/7 Wall St.

Find homes for sale and for rent in San Francisco.


Photo: Flickr/El Frito

Average number of days on market: 45
Median home price: $350,000 (17th highest)
Population: 3,439,809 (21st highest)
Unemployment: 7.40% (56th lowest)

The Seattle metropolitan area has a population of more than 3.4 million people, yet only 6,486 homes available for sale. With such conditions, it is not surprising that homes will get snatched up pretty quickly. Houses on average sit just 45 days on the market, which is down nearly 34% since last year.

Read more at 24/7 Wall St.

Find homes for sale and for rent in the Seattle area.


Photo: Flickr/dherrera_96

Average number of days on market: 44
Median home price: $149,500 (23rd lowest)
Population: 839,631 (60th lowest)
Unemployment: 14.14% (fourth highest)

Bakersfield joins many other California cities in selling homes fast, but houses in the area are not likely to have San Francisco-like prices. The median home price of $149,500 is the lowest on this list, except for Detroit, and only a little more than a fifth of the median price of a San Francisco house.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Bakersfield, Calif.


Photo: Wikimedia/Bobak Ha'Eri

Average number of days on market: 43
Median home price: $174,900 (58th lowest)
Population: 930,450 (62nd highest)
Unemployment: 15.54% (second highest)

Fresno has many similarities to Bakersfield. The median home price of $174,900 recorded in June is far lower than other California cities such as San Francisco and San Jose, but it is up 10 percent from a year earlier. Similar to Bakersfield, the 2,237 houses on the market are nearly half (49.1 percent) the number that were available last year.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Fresno, Calif.


Photo: Flickr/Mel B.

Average number of days on market: 43
Median home price: $289,500 (23rd highest)
Population: 380,821 (20th lowest)
Unemployment: 6.13% (22nd lowest)

Prospective homebuyers in Anchorage really do not have the option of being choosy. There are only 1,120 houses on the market, a decline of about 29 percent from the previous year. This is the fourth-smallest number of home listings in all metropolitan areas surveyed.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Anchorage, Alaska.


Photo: Flickr/Wonderlane

Average number of days on market: 33
Median home price: $269,000 (27th highest)
Population: 2,543,482 (27th highest)
Unemployment: 7.51% (67th lowest)

The 33 days to sell a house in the Denver area is actually up by 10 percent, one of the very few metro areas to see an increase in the time it takes to sell a home. Denver was not as hard hit by the housing bust as many other metropolitan areas. Home prices from their peak in the first quarter of 2006 to the fourth quarter of 2011 dropped just 11.1 percent, well below the national average of 34.2 percent.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Denver.


Photo: Flickr/Nokero

Average number of days on market: 24
Median home price: $379,000 (12th highest)
Population: 4,335,391 (16th highest)
Unemployment: 9.56% (20th highest)

If you want a house in Oakland, you had better grab it while it’s hot. The average house in Oakland is sold 24 days after its been on the market, the fastest of all metro areas by a sizable nine days.

Read more at 24/7 Wall St.

Find homes for sale and for rent in Oakland, Calif.


Photo: Flickr/hortulus

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