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Is real estate rebound for real?

Posted by Scott Van Voorhis August 29, 2012 09:06 AM

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Wouldn't seem to be much for the real estate bears to growl about right now, with all the key numbers pointing up.

Certainly latest piece market reports, both local and national, can't be simply brushed aside as a fluke or self-serving propaganda by real estate boosters.

July homes sales were the best since 2005, soaring nearly 27 percent, The Warren Group, publisher of Banker & Tradesman, reports this morning.

The Massachusetts Association of Realtors reported a similar 22.7 percent jump in July sales in its monthly report.

Nationally, all 20 cities tracked by the Case-Shiller index saw price gains in June over May, with Boston posting a 2.5 percent increase, though Hub prices were essentially flat year-over-year.

Still, there are more than a few reasons to be cautious, though it may be hard to for the bears out there to get worked up into full roar. I guess we will have to see about that.

Yes, Massachusetts home sales are the best since July 2005. But that said, there is a still a big gulf between the overall level of activity we are seeing now and what we saw back during the market's peak in the mid-2000s.

OK, the nearly 5,000 homes that changed hands in Massachusetts in July are nothing to sneeze at.

But it is still a far cry from the 6,672 homes that sold in July 2005.

Second, the macro economic situation is still highly unsettled and could unravel all the recent gains in matter of months.

We certainly haven't heard the last of the debt crisis in Europe, which has the power to trigger a repeat, or worse, of the global economic meltdown that happened back in the fall of 2008.

Then there is the fiscal cliff that looms next year, with a series of draconian federal budget cuts set to take place unless Congress and whoever wins the presidential election in
November is able to pull out a last minute compromise.

At the least, it promises to be another disruptive cliff hanger. At worst, we could be looking at another recession.

And if that's the case, then you can say goodbye to any hopes for a long-lasting real estate recovery.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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