New Jersey Real Estate Report

From the WSJ:

Home Prices Reflect Strengthening

Home prices in the second quarter rose from the year-ago period for the first time since 2007, according to a closely watched index, the latest indication the housing market is starting to recover.

The report, which is scheduled to be released Tuesday by real-estate firm Zillow Inc., found that for the quarter ending in June, home values were up 0.2% from the same period in 2011.

While other indicators have shown home prices turning up since the spring, most examined short-term changes from one month to the next. Other indexes reported gains in median sales prices, which can be skewed based on the type of homes that are sold. But Zillow measures prices of comparable homes in the same community, which some economists say provides a truer picture of market trends.

Nearly one-third of the 167 metropolitan areas tracked by Zillow posted annual price increases for the second quarter compared with the year-ago period. Prices rose fastest in cities with fewer homes for sale and strong investor demand.

“It seems clear that the country has hit a bottom in home values,” said Stan Humphries, Zillow’s chief economist, who had previously forecast that housing wouldn’t hit bottom until late this year or early in 2013. The fact that the gains came during a period in which the economy wasn’t very strong suggests “there’s some fundamental organic strength to the housing market,” Mr. Humphries said.

From Bloomberg:

Sales of Previously Owned U.S. Homes Probably Climbed in June

Sales of previously owned U.S. homes probably rose in June, a report may show today, a sign the recent pickup in demand will be sustained.

Purchases climbed 1.5 percent last month to a 4.62 million annual rate, matching April as the fastest since January, according to the median forecast of 76 economists surveyed by Bloomberg News. Jobless claims increased last week, another report may show.

Mortgage rates at all-time lows and a drop in prices have made properties more affordable for Americans with access to credit. At the same time, the recovery in the housing market will take time as the economy is slow to create jobs and lingering foreclosures put more homes on the market.

“We’re past the bottom and slowly recovering,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “We might have one more bout of price weakness ahead when the foreclosure pipeline empties later in the year, but investor demand is strong and we’ll absorb that.”

The report from the National Association of Realtors is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 4.46 million to 4.75 million.

Federal Reserve Chairman Ben S. Bernanke is among those who say the housing market is improving.

Growth in construction and “historically low mortgage rates” are among “modest signs” of a housing recovery, even as some buyers show concern about personal finances and the broader economy and have difficulty meeting lending standards, Bernanke told the Senate Banking Committee this week.

From the WSJ:

Yea! Home Prices Hitting Bottom. Now, the Bad News.

This is a great time to buy a home in many parts of the country. There are signs that the downward price spiral is bottoming out. Mortgage rates are at historic lows.

The next few years could well be remembered as the best opportunity for Americans to buy homes since the postwar baby boom.

But one group’s opportunity is another group’s problem. Tens of millions of baby boomers and other home owners have seen their equity shrunken or wiped out completely. Many were counting on their homes to help finance their retirements. Often they have been waiting for years for the market to turn. Now they find themselves on the short end of the deal, sellers into the buyer’s market of the century.

“It’s a really challenging environment to be a seller,” says Lawrence Glazer, wealth adviser at Mayflower Advisors in Boston. “Unfortunately, many people planning to retire may have no choice.”
…
The last crash took more than a decade to work through—and this market could take an especially long time because the huge accumulation of empty, foreclosed houses will hold down prices for all properties.

When adjusted for inflation, the Case-Shiller index didn’t return to its 1989 peak until 2000. Some markets, such as New York and Los Angeles, didn’t hit new highs until 2002. This time may be even worse because the bubble was much, much bigger. Some locations may not recover their inflation-adjusted peak in our lifetimes.
…
The bottom line? The national housing market may take many years to recover. It’s a buyer’s market, but home owners hoping to sell need to do their math first.

From the WSJ:

Housing Passes a Milestone

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.

The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a housing data-analysis firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won’t happen again this year, he says.

Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.

“Even with the overall economy slowing,” Wells Fargo Securities economists said, cautiously, in a note to clients, “the budding recovery in the housing market appears to be gradually gaining momentum.”

Economists aren’t always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don’t.