If you don't think the housing market is improving, try buying one
Maybe he and the other doom-and-gloomers are right and we're all going to be living in cardboard boxes soon, but In my close-in, 1,000-house Detroit-area subdivision, there is plenty of evidence to the contrary. For one thing, there are almost no houses for sale. That's right. Here in the foreclosure epicenter, the house up the street from me sold in three days and had three bidders who drove the selling price up about $5,000 from the $175,000 asking price.
The buyers paid about what we paid for a house in this neighborhood 10 years ago – down from what the prices were at the height of the bubble, but Midwestern home prices never went through the roof.
Today's buyers are almost 100% Gen-Xers, couples and singles, with children. In many ways, the same sort of people who have always lived in my 50-year-old neighborhood where kids still walk to well-regarded schools.
The situation is similar in other parts of the country. Housing inventories are considered tight when it would take buyers six months to buy up the backlog. In Denver, there is a 5.7-month supply of homes for sale; Phoenix, 4.5 months; and San Francisco, 3.2 months. reports CNNMoney.com.
All over California, the supply of homes that sell for less than $300,000 is tight, said Leslie Appleton-Young, chief economist for the California Association of Realtors.
In the Pacific Northwest, Lennox Scott, CEO of John L. Scott Real Estate, doesn't believe the end of the tax credits will ease demand. "In lower price ranges, prices will stay fairly stable because we're undersupplied," said Scott.
The National Association of Realtors announced today that 91 out of 152 metropolitan statistical areas showed higher median existing single-family home prices compared with prices in the first quarter of last year. Of those with higher prices, 29 had double-digit increases.
Gloom can have negative implications. For instance, it apparently drives some people to default on their mortgages, according to a study by University of Arizona Associate Professor Brent White. White studied defaults in which the borrower could have avoided losing his home, but went that route because he owed more than the home is currently worth. White told The Wall Street Journal that deliberate default isn't the result of thoughtful strategizing, but a response to anxiety. He called default "contagious" with people more likely to default if they know others who have done so.
Maybe I'm overly optimistic, but the U.S. Census predicts that every 12 seconds, the U.S. population increases by one person. All those people are going to have to live somewhere. Why not in a comfortable, well-priced home that they call their own? So I'm betting that the housing market will survive and those of us who stick it out and pay our bills will be rewarded – sooner rather than later.