Aug 23 - Home sales are on the rise and the consensus grows that the housing market may finally be on the path to a sustainable recovery. Bobbi Rebell reports.
For the past few years, the collapse of the housing market has been a ball and chain dragging Americans down. But the housing sector may finally be breaking free. New and existing home sales are on the rise and prices are moving higher as well. And here are five reasons the housing sector rebound may finally be the real deal Number 1: No one wants to miss the sale: Jed Kolko, Chief Economist, at Trulia: SOUNDBITE: JED KOLKO, CHIEF ECONOMIST AND HEAD OF ANALYTICS, TRULIA (ENGLISH) SAYING: "People are now expecting prices to start rising. if people expect prices to rise, buyers get impatient because they don't want to miss the lowest prices but sellers might decide to hold off if they are expecting prices to rise, if they think they are going to get a better price 6 months or a year from now than they will get today. " Two: Even though credit is still tight, the banks are starting to come around: Wharton Real Estate Professor Susan Wachter: SOUNDBITE: SUSAN WACHTER, PROFESSOR OF REAL ESTATE AND FINANCE, WHARTON SCHOOL AT THE UNIVERSITY OF PENNSYLVANIA (ENGLISH) SAYING: "Lenders in general are bringing more confidence to the market and as they have more confidence in the market it appears and I believe that constraints will ease some as well and that too will be a positive home ownership in this market. Three: Fear of missing low mortgage rates: SOUNDBITE: SUSAN WACHTER, PROFESSOR OF REAL ESTATE AND FINANCE, WHARTON SCHOOL AT THE UNIVERSITY OF PENNSYLVANIA (ENGLISH) SAYING: " Rates are at historic lows but they are on the way up. if that trend appears to catch then we may have a move to apply and move quickly to apply for more purchase mortgages in the fear that mortgages might dramatically increase from their historic lows . " Four. Foreign investors are leaving empty handed: SOUNDBITE: JED KOLKO, CHIEF ECONOMIST AND HEAD OF ANALYTICS, TRULIA (ENGLISH) SAYING: "During the recession when prices got very low we saw a lot of interest from abroad. foreigners were very interested in bargain homes in the US that they could buy as investments but now we are seeing the share of foreign searchers fall as prices are recovering. people who are looking for the best bargains are finding fewer bargains to be had and that means that more of the searches are shifting from foreigners back to the US. And Five: The worst of the foreclosure mess is behind us: SOUNDBITE: SUSAN WACHTER, PROFESSOR OF REAL ESTATE AND FINANCE, WHARTON SCHOOL AT THE UNIVERSITY OF PENNSYLVANIA (ENGLISH) SAYING: "What are those solutions? one are short sales and there is real action on that yesterday to encourage short sales short sales are up, secondly loan modifications and there's news there also loan modifications now are the new modifications are working. they are succeeding. That's a shrift in the market so instead of this real concern that we were going to have a flood of real estate owned pulling prices down it looks like there will be a number of solutions in place that will help keep that wave under control. But nothing is written in stone. The job market remains weak and many consumers are still tight on money. But for now the housing industry is looking a lot more hospitable. Bobbi Rebell, Reuters.