A recent blog post on Trulia by economist Jed Kolko makes the claim that the housing market is 47% back to “normal.” Kolko uses three primary measurements of the market as indicators of its state – new housing starts, existing home sales and the delinquency (foreclosure) rate in the groups of markets that he tracks. Kolko compares these numbers against their worst state at the depth of the recession and their best at the pre-burst peak of the market. The data in Kolko’s blog are from October and from very reliable sources. His percentages of recovery are basically percentages of the change from the worst to the known best state for those three indicators.
According to Kolko, new construction is 41% back to normal, up 47% year-over-year against last November. Existing home sales he sees as being 59% back to normal and delinquencies/foreclosures are 41% of the way back to normal at a current rate of 10.64% nationally. He has some interesting charts in the story that show the trends, starting with his Housing Barometer. Click on the link in the first sentence to read his blog article and see the charts.
In this area, I just posted the November home sales numbers for Milford, Highland White Lake, Commerce, South Lyon and West Bloomfield Townships in Oakland County and Green Oak, Brighton and Hartland Townships in Livingston County. You can see that data and the 3-5 years’ worth of data that I’ve been collecting for those markets on my web site – www.movetomilford.com. I think I’m going to have to start charting my data, too. It does make it easier to see the trends. I’ll start that in January of 2013 and go back a couple of years just to get the trend lines going.
Just based upon my own observations and the data that I collect and post, I can also see the recovery happening, albeit a bit slower in some markets, but quite rapidly in pockets locally. I also look at the trend in home sale values and the sold price per square foot, which have been rising in all the markets all year. Foreclosures and short sales are down to below 50% in all of the markets that I track and down close to the national average in some – good news.
Currently slowing the recovery a bit locally is the lack of inventory. Too many people still believe that they are underwater on their homes, so they are still hunkered down waiting out the market. For many the time to at least take a look at where they’re at in terms of market value has arrived – they just don’t know it yet. I’m pretty sure that we aren’t 47% back to the pre-bust “normal” of 2005-6, but our market has markedly improved and it’s definitely time for people to leave the bunkers and test the market.
The local economic news is also improving, so the economic risk factors are down for making a move, too. My advice is to at least get an informed opinion from a Realtor about what you house is worth today, so that you can make intelligent decisions about whether to go ahead with retirement plans, move-up plans or whatever plans you have that involve making a real estate change. Email or call me 248-763-2497, if you’re in this area and let me take a look at your home-value situation – you may be pleasantly surprised.