By Tom Hudson, McClatchy Newspapers –
The job market is under repair. Household debt is being fixed up. But most of the American housing market remains in pretty shabby condition.
There are pockets of strength. The San Francisco Bay Area, with its high-tech payrolls, has continued to defy conditions that have damaged the Southern California market. Areas surrounding Washington, D.C., never collapsed, thanks to the relative stability of government work. And parts of Miami have come roaring back, with Brazilians and Venezuelans countering each other’s cash offers for condos near the beach.
There are no fewer than six reports due in the coming week on the U.S. housing market. Homebuilder optimism and existing- and new-home sales are the most closely watched.
Builders have become more positive, but that’s natural for an industry putting holes in the ground. The pace of sales has picked up thanks to price erosion and how the Federal Reserve has trashed savers. Historically low interest rates have left frugal investors with few choices to generate steady, long-term returns.
The housing industry is integral to the economy reaching the velocity necessary to escape the drag of higher gasoline prices. From construction to candlestick makers, residential real estate casts a huge influence.
Everyone loves a bargain, except for the seller. Fewer homes are for sale — that is, supply is shrinking — while the number of sales has been growing, a sign of higher demand. But median prices still continue dropping. While bidding wars may be back in some Phoenix-area developments, other neighborhoods are seeing homes sell for the same price they went for 15 years ago.
The American housing market may have growing curb appeal, but its foundation still needs work.
