Housing in Recovery?

From RealtyTimes.com, Kenneth R. Harney suggests greener pastures for the housing market in his following article (Real Estate Outlook: Housing in Recovery):

Assertion #1:

... new mortgage applications increased last week by 12 percent, according to the Mortgage Bankers Association. Applications from people looking to buy houses with FHA loans were up by 15.3 percent, while applications from purchasers seeking conventional mortgages rose by six and a half percent.

Assertion #2:

... remember that there is a huge pent-up demand simmering away out there for housing -- especially from first-time buyers who want to scoop up low-priced deals.

Assertion #3:

When fixed interest rates drop -- and last week they were down by a quarter of a percentage point -- those buyers start doing the math and getting into the market with offers.

Assertion #4:

Another piece of positive news you may not have noticed: Pending home sales were higher than year-earlier levels for the second straight month -- 1.6 percent higher than September 2007 .

Although pending sales contracts were down slightly for the month, in the western states they were up by 3.7 percent, and now stand at an extraordinary 39.7 percent higher than they were at the same time in 2007.

Assertion #5:

At the National Association of Realtors' convention in Orlando, chief economist Lawrence Yun, warned the delegates not to expect a housing recovery overnight, certainly not with unemployment on the rise. But he projected a slow, steady, multi-year upward trend, with 5.02 million total sales this year, 5.3 million for 2009, and 5.6 million for 2010.

Already sales are up significantly in major markets in many parts of the U.S. Yun specifically mentioned the west coast of Florida, the Phoenix area, Virginia, Long Island New York, Kansas City, Minnesota and Idaho.

Harney's conclusion:

So here's the key point to keep in mind as you try to make sense of the headlines: The stock market is NOT the housing market. It's on a whole different set of tracks. And it's been in a highly volatile state for more than a month.

Housing, on the other hand, has already endured its painful correction for two and a half years … is now pretty much stabilized … and is slowing moving toward its cyclical recovery.

Do you agree with Harney's assessment?

Logic would dictate that we're closing in on the bottom because housing prices have been tanking and are nearing, in many locales, pre-housing boom levels. The Fed's have been endlessly pumping liquidity into our markets and have been working towards spurring the banks to start lending again. Naturally, there would be pent-up demand for housing as many potential home buyers have been "feared" to the sidelines or simply cannot obtain a loan with the latest round of tightening standards.

In short, the housing market is ready to bottom. However, one of the major problems still to be dealt with is the deteriorating economic conditions that we remain confronted with. Times are bad and people are currently losing their jobs in large numbers. We don't believe prices will continue to tank at the fevered level of the past year but we do believe that housing will struggle to find its footing until much of these economic problems can be dealt with or at least have the appearance of being dealt with to build consumer confidence.

Is it a good time to buy? We believe it is. Don't worry about the last 10% as you can make this up, and then some, by negotiating a good deal. Five years down the road, you'll be glad you did and wish you bought more.