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Housing is up, so why are consumers so down?

Posted by Scott Van Voorhis May 2, 2013 08:28 AM

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There are a lot of high-fives being exchanged right now about rising home prices, at least among real estate brokers and market observers.

Greater Boston home prices were up 5.2 percent in February compared to the same month a year ago, according to the latest Case-Shiller report, the gold standard of real estate market tracking.

The Warren Group and the Massachusetts Association of Realtors both reported even higher price increases for March.

Yet scratch a little, and the housing recovery appears less solid than it looks on the surface.

Yes, buyers are back and looking, but driven more about by the lure of rock-bottom interest rates, an artificial creation of the Fed's vast monetary manipulations.

And sellers have yet to return to the market, helping drive the number of homes on the market down to all-time lows.

In fact, that's been the major factor driving prices up - scarcity, not unbounded optimism over the future of the housing market, or even less the economy.

Here's a pretty telling consumer confidence from Mass Insight, a local think tank. It came out in February, yet, if anything, the job market outlook is worse now than it was then.

Among the lowlights:

  • Nearly half, 46 percent, thought jobs were "scarce"
  • Well more than half, 62 percent, thought the number of jobs would either be the same or lower in six months
  • More than a quarter reported that either they are someone in their house was unemployed during the past month, a number relatively unchanged since 2010.

So what's your consumer take on the local housing market, economy?

Are things looking up to you, or are you still down in the dumps?

This blog is not written or edited by Boston.com 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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