More signs this housing rebound is real
That’s my take on the spate of mostly encouraging local and national real estate numbers that just came out.
The S&P/Case Shiller home-price index, which tracks 20 major metro markets, posted its biggest gain since 2005, rising 1.2 percent in July.
Boston prices rose another 1.2 percent. (Seasonally adjusted, it is a smaller, .6 percent gain.) Overall, Boston home prices are off just 4.9 percent from last year, compared to more than 34 percent in Las Vegas, Case-Shiller reports.
The local numbers also looked solid. The Warren Group reported that single family home sales were up 2 percent, year-over-year, in August, while the Massachusetts Association of Realtors cited a smaller, .4 percent gain.
Median sale prices for the state appear to be firmly back over $300,000 again.
Still, don’t expect that will stop the doom-and-gloomers. After all, it was just a week or two ago bank analyst Meredith Whitney was touting her prediction of another, 25 percent drop in home prices.
That kind of collapse looks increasingly implausible, though there are still lots of things to fret about, if you are so inclined.
While the trends appear headed upward, much of this rebound is being financed by Uncle Sam. There are the billions being poured into that first-time buyer tax credit, not counting the even more vast sums the Federal Reserve is spending to prop up the mortgage market.
As the Fed and the Treasury start to slowly pull the plug on all these subsidies, will the market keep flying on its own or go into a tailspin?
And that’s before we get into the ongoing foreclosure crisis, which, with still rising unemployment, appears to have gotten a second wind.
That said, maybe it’s time for a little optimism. At least it no longer looks like Armageddon out there.
