Harvard Housing Report Delivers Facts and Figures
The Joint Center for Housing Studies at Harvard University released “The State of the Nation’s Housing” report on June 14, 2010. The report is broken into 6 sections.
Section 2 – HOUSING MARKETS
Are we in a recovery period?
There is no crystal ball. History has shown the link to a robust and consistent housing recovery is an increase in jobs. Although the number of home sales increased in 2009, on the down side we have increased number of vacant units, foreclosures and unemployment. The report states, “As job growth resumes, however, household growth should pick up and help spur increased new construction and sales. With the economy, existing sales, and consumer confidence already turning around, home improvement spending should soon follow suit.”
Is it the chicken and the egg story?
An increase in new construction and sales, along with home improvement spending should give a job market a boost. Or is it the other way around? Federal programs have helped to boost the economy. $5 million in aid to contributed to states to provide low-income owners free weatherization of their homes. Federal incentive programs are encouraging home owners to upgrade the energy efficiency of their homes. Yet the expiration of the tax credit may cause a hiccup or two in the upward swing.
What about the issue of the vacant units?
The large number of foreclosures impacts the homes held “off market” and often vacant. Some of these homes may be converted to rentals. The number of vacant rentals have increased. Even though number of sales may have increased in many areas, market values are still “sagging.”
House of Cards
When prices fall, owners are having trouble making mortgage payments, may be less likely to sell.
“According to the First American CoreLogic, roughly one-quarter of American homeowners were underwater in the first quarter of 2010.” This contributes to the number of properties held “off market.”
Why I am Fascinated by This Report?
A good dose of facts and figures are the “spoonful of sugar” helping the medicine go down. Things are looking up but we are still not out of the woods. When trying to establish the market value of a property, it is vital that we look at our own local market. Take a look at the chart of house prices by city below. Our view should not be clouded by media hysteria. Yet pending sales and national statistics help us to get a sense of what we can expect. This report is full of stats, no hysteria here. Just the facts. You connect the dots.