CREShow: Housing Market Improving At Last, Say Experts
After a tumultuous few years, the U.S. residential housing market has finally began to show some significant signs of improvement and is poised for a “slow and unsteady” recovery in the months and years ahead.
That was the take of show host Michael Bull and his guests on the most recent episode of “America’s Commercial Real Estate Show,” which provided a look at the U.S. residential housing market.
Single-housing starts have increased 20 percent compared to this time last year, said Brad Hunter, chief economist with MetroStudy, which tracks housing conditions in 84 metropolitan areas across the country.
Furthermore, single-family home absorption has increased 12.4 percent during that same timeframe, he added.
“It means people are feeling more confident and getting past the problems with financing,” said Hunter.
Hunter did point out one dichotomy plaguing the housing market: although a whopping 1 million developed lots are awaiting purchase by builders, lots in close-in, A and B locations are in high demand by builders, who are often engaging in bidding wars for those sites. However, there is virtually no demand for developed lots in the far-flung suburbs, hence the huge supply.
Robert O’Brien, a partner at Deloitte & Touche who heads the firm’s U.S. real estate services practice, noted the Case-Shiller Housing Price Index rose 0.7 percent in April and also said his firm has observed an improved transaction volume, declining home inventories and shorter sell times.
Still, “it’s going to be slow and unsteady but we expect to see improvement throughout the remainder of 2012 and into 2013,” O’Brien said. “The fact that it’s a modest recovery doesn’t surprise me.”
Despite its noticeably improved performance, the housing market is going to need some help to get truly on track, said Steve Palm, president of Smart Numbers. “For the housing industry to really keep this momentum, the economy has to improve, bottom line,” he said.
Buyer motivation has increased in recent months, and homes in A locations and in the $400,000 to $1 million price range are seeing significant activity, said Todd Thrasher, a managing partner with Brooks Chadwick Capital.
“It feels good to finally feel good about housing,” Thrasher said.
The entire episode on the U.S. residential housing market is available for download on the show’s website, creshow.com. The next episode will be available July 19 and will provide a look at CMBS loan restructurings.
“America’s Commercial Real Estate Show” is a national talk radio show about commercial real estate. New shows are available beginning every Thursday at the show website, www.CREshow.com. Shows are also broadcast on AM stations, including Atlanta station Biz 1190 WAFS on Saturdays at 10 a.m. Show podcasts are available on-demand on iTunes and the show website.
The show host is 30-year commercial real estate veteran Michael Bull, CCIM. Michael is the founder of Bull Realty, Inc, a regional commercial brokerage firm with three offices headquartered in Atlanta, Georgia.