A Real Estate Recovery?
Home prices in Seattle rose 1.1 percent from April to May, which mirrored the increase recorded in the nation’s largest cities for the same period, according to a new study.
But for the year, home prices in Seattle have fallen 7 percent, compared with the national average drop of only 4.5 percent in the 20 largest cities, according to the Standard & Poor's/Case-Shilller Home Price Indices.
Despite the one-month increase in Seattle and nationally, analysts aren’t saying the real estate market has recovered. Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery.
Optimism or positive sentiment is needed and improved consumer confidence is necessary for a lasting revival in housing with rising prices. There are other factors and it is difficult to point to one primary factor. Increased willingness of banks to lend money for mortgages is another, as is improvements in consumers’ financial condition along with stronger economic growth and declining unemployment. And, resolving the fiscal policy issues in Washington would probably be helpful as well. Someone might note that all these factors reversed since the boom days of 2006 when home prices were soaring. Home prices, the economy and consumer sentiment all interacted and rose together in 2003 to 2007 and then fell together in 2008-2009. It will take more than one primary factor to turn the whole things around. David Blitzer Chairman of the Index Committee S&P Indices