Real estate and recovery
The broken economy isn't a single problem. It's a hundred different things that aren't working or paying or selling the way they should. But in the midst of a deep recession, some economic problems are more critical than others.
The big three: growing unemployment, America's shaky financial system, and the staggered real estate market.
We're all in for much tougher times if the pace at which people are losing their jobs, still in excess of 600,000 per month, doesn't slow down.
The financial system will get a vote of confidence, or not, after the government releases the results of its big-bank stress tests later this week.
And then there is real estate, the original sin of our economic calamity. Depending on how you tilt the frame, the real estate picture is actually starting to look better. It is one modest reason to be more optimistic.
A real estate recovery is important to the economy because home prices and mortgages were at the heart of the excesses that got us into so much trouble.
Improvement in real estate markets would ease the grip of other economic problems, like damaged bank balance sheets.
The real estate news isn't uniformly good, and only some people interpret the monthly blare of news and data as positive. I would be one of them. Don't call this the start of a recovery yet, but the bottom may not be very far away.
All the leading real estate economic reports were dismal in January, the worst for many years, or ever. Those same reports nearly all ticked up in February, a hint of a market bottom to some. Then the numbers for March came in all over the board, some improving and others taking a step back.
"Those two months were the first time in a long time that things were not pointing straight downward," says Wellesley College economist Chip Case. "I take that to mean a bottom isn't about to crash into us, but we're closer than people think."
One final real estate statistic, issued just yesterday: Pending sales of existing US homes increased by 3.2 percent in March, after a 2 percent increase in February, according to the National Association of Realtors. That marked the first back-to-back monthly improvement in more than a year.
Figures for pending resales are important because they offer a good indication of what actual sales will look like in the near future. That would be right about now, if you are looking at March contracts.
Speaking of right now, there are powerful incentives working in the favor of real estate markets.
For one, prices have already fallen substantially. Another is the cost of money, which is extraordinarily low when mortgages are available below 5 percent. Throw in the government's $8,000 incentive for first-time home buyers, and you've got a lot of accelerant in the market.
Anecdotally, the spring real estate market sounds upbeat, too. Talk is cheap, but most of it is encouraging at the moment.
That doesn't mean that everyone sees improvement in real estate markets right now. Some economists, such as Patrick Newport of IHS Global Insight, think the spring season will be weaker than it was last year.
"I don't think you're going to see sales or prices collapsing," Newport says. "But I think it's going to be worse than last year. Sales are going to continue to drop and then level off in the middle of the year."
That's only a couple of months away. Newport, like Case, also sees the ups and downs of real estate sales records during the first three months of the year as a signal that the worst may nearly be over.
"When you see numbers bouncing around like that, it may be a sign things are starting to hit bottom," Newport says.
The real estate recovery is complicated because there are really two markets at work. One is made up of homes sold by conventional owners and the other, an auction market, is dominated by distressed and foreclosed property.
Sellers appear to be biting the bullet and unloading heavily discounted property in the auction market. The big question: How much more distressed real estate is still in the pipeline?
There are reasons to be more optimistic about America's real estate markets soon. But the broader economy still has an impact on the people who buy and sell homes.
The recovery that may be on the horizon will stay there if hundreds of thousands of people continue to lose their jobs every month.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com. 
