Economic News

Trulia: housing prices have bottomed, now rising

Inventories are tightening, asking prices are rising, rents are increasing, and Trulia points to job growth, saying a residential real estate recovery has already begun.

Asking prices on the rise

According to the Trulia Price Monitor and Trulia Rent Monitor released this morning, listings on Trulia through April 30th show asking prices of homes for sale are up 0.5 percent for the month, marking the third consecutive month of rising asking prices. Asking prices rose 0.2 percent year over year, pointing to national price stabilization.

Trulia reports that the largest asking price increases were in Miami and Phoenix, noting that 44 out of the 100 largest metros had year over year price increases, and fully 92 percent had quarter over quarter increases, seasonally adjusted.

Rents on the rise

Rents rose 5.6 percent year over year nationally, but rents varied wildly depending on the area, with Trulia reporting rent increases tending to be the highest in regions experiencing fast employment growth such as suburban Detroit (Warren-Troy-Farmington Hills, MI) and Silicon Valley (San Jose, CA) with the largest decline in Las Vegas where job growth is still struggling.

“Houing prices have already bottomed”

“Housing prices have already bottomed with asking prices on the rise for three straight months. Aside from a stumble in December, asking prices have been stable or rising for the last eight months,” said Dr. Jed Kolko, Trulia’s Chief Economist. “Prices have joined the recovery, alongside sales and construction. But foreclosures threaten prices, especially in judicial-foreclosure states like Florida, New Jersey, Illinois and New York, where many more distressed sales are still to come.”

“Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners,” said Dr. Kolko. “But relief for strapped renters may be in sight. Construction of multi-family buildings revved up last year. These new rental units will come to market later this year, giving renters more choices and less fierce competition.”

Residential real estate already recovering

“The single-family market has already begun to recover,” observed Dr. Kolko. “New home starts are more than 30% higher than their low in early 2009. And asking prices on for-sale homes (single family + condo) have risen for three months in a row, according to the Trulia Price Monitor.”

“There are still risks to single-family prices, primarily from soon-to-come foreclosures that could depress prices, but that risk might turn out to be localized in states with larger foreclosure backlogs like Florida, New York, New Jersey, and Illinois,” concluded Dr. Kolko.

Housing policies during an election year

Dr. Kolko told AGBeat, “The upcoming election means we won’t see bold new housing policies. The political atmosphere is too charged for agreement on major housing policy issues. And, because the market is now recovering, there’s less of a sense of urgency than there was several years ago.”

He added, “The inaction will probably not have much impact on the housing market, though. At this point, the coming turnaround in prices and other positive indicators will do more to boost confidence than government action.”


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