Home sales on the rise

We are aware of admonitions that one swallow does not a summer make and the futility of clutching at straws, but one figure stands out in the latest outpouring of statistical indicators, mostly ranging from bad to real bad, about the housing market.

Sales of existing homes actually rose in February, 2.9 percent over January, according to the National Association of Realtors. If this is a turnaround, it is a modest one because sales were still down nearly 24 percent from a year ago.

The home sales rose even as prices are still falling. The median home price, $195,900, is down 8.2 percent from $213,000 a year ago February. And home prices will likely continue to fall, although perhaps not as precipitously, until the vast inventory of foreclosed homes — currently one in nine on the market — is liquidated.

Uptick in sales

But economists see the uptick in sales as a promising indicator that prices have fallen far enough to entice buyers back into the market. In the best case, these buyers would be the working families who were priced out of the market during the boom. And priced out they were. The oft-cited S P/Case-Shiller index showed home prices rising 74 percent from 2001 through 2006 while the median household income rose only 15 percent. These are buyers who want a home for the best possible reason — to live in it — rather than as an improbably ever-rising investment.

Some economists see the housing market stabilizing in the second quarter, others by the end of summer, still others by the end of the year, with the more pessimistic not seeing real improvement until next year.

This may not be the absolute bottom of the market, but maybe we can at least see it from here.

Scripps Howard News Service