Report: Recovery Influencers Betting on Different Markets

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You will know that the housing market has truly recovered when new housing starts are back to normal. Please read the article below and let me know what you think.

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When looking at the housing recovery through the lens of prices, we appear to be well on our way. However, according to economists at online real estate marketplace, Trulia, prices are only half of the picture.

“A full housing recovery requires rebounds in both prices and new construction,” Trulia stated Thursday with the release of the Trulia Price Monitor and the Trulia Rent Monitor.

Prices were up 11 percent year-over-year in August, according to Trulia, which monitors list prices, but construction activity is severely lagging.

Construction permits for the year are between 60 and 70 percent of their historical averages from 1990 through 2012, according to Trulia.

Additionally, when it comes to price gains and increases in construction, markets tend to be experiencing one or the other. Markets that have experienced rapid price growth are experiencing meager construction activity.

“Investors and builders have bet on different local markets,” said Jed Kolko, chief economist at Trulia.

“Investors have bought in the boom-and-bust metros,” according to Kolko. On the other hand, “[b]uilders, however, are betting on markets that avoided the worst of the crash, like Boston, much of Texas, and the expensive California coast,” Kolko said.

To read the complete article – please use the link below.

Recovery Influencers

Explore posts in the same categories: Real Estate Market Trends

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