Two reasons for optimism about a local housing recovery

August 24, 2010
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Realtors—the perpetually “now’s-the-time-to-buy” crowd—have had a hard time keeping their optimism the past few years as home prices fell and foreclosures rose.

So Dave Caveness, an executive at one of the largest local brokerages, Carpenter Realtors, can be forgiven if he’s out on a limb touting what he sees as the start to a recovery.

Pending sales, where contracts have been signed but the deal hasn’t closed, have taken a small leap this month, up 5 percent from the same stretch in July.

“Doesn’t sound like a lot unless you’re in the residential real estate market and you’re looking for the turn,” Caveness says. “I am declaring this the uptick. This could be the beginning of the housing turnaround in central Indiana.”

The change is a brilliant bright spot to Caveness because the collapse in home sales after the federal homebuyer tax credit expired April 30 was so daunting. Activity shot up that Friday and then went limp until the last two days of July, he says. The trauma was so pointed that he compares the memory with a “Where were you when Kennedy was shot?” moment.

More evidence that the local market finally is turning comes from list prices, which have been trending upward for 10 straight months, Caveness notes. “Values are beginning to harden up a little bit.”

The list price is the price listed prior to the offer that triggers pending status. Historically, the final sale price is 3 percent less than the list price, a rule of thumb that held through the downturn.

All in all, Caveness thinks the bottom has come and gone.

Do you agree that a recovery is underway? If so, will it hold in the face of rising foreclosures?

  • Realtor FLUFF
    What KoolAid is he drinking???
  • Glut
    Not sure the recovery has begun with all of the "short sales" and foreclosures on the market, there is a lot inventory out there... good for buyers that want to endure those processes but not so good for sellers. Give me another glass of the grape stuff.
  • Yeah, right
    The housing market in the USA has been changed for the foreseeable future. It is not going to "recover."

    This mess isn't going to shake out for a decade or more as the housing industry and what's left of the manufacturing industry is slowly replaced with something else. Our economy has changed and the effects of that change is slowly starting to creep into society. This stuff doesn't happen overnight. Our society still demands instant gratification and those days are over.

    Good luck Mr. Caveness, but your industry is going to have to do with a lot, a whole lot less; and you are not alone.
  • One more thing
    This quote from the post is incredibly misleading - "The list price is the price listed prior to the offer that triggers pending status. Historically, the final sale price is 3 percent less than the list price, a rule of thumb that held through the downturn."

    This may be true, but only after the original list price has been reduced time after time after time after time.
    • you missed the point
      The quote is not misleading at all. The point was the year-over-year comparisons of the list price of homes selling is up! 10 straight months. That's after all of the price reductions sellers hav ahd to endure. All I'm reporting are facts. I will admit you have to look hard to find the positive...but there is some. No one has to tell me about how challenging the real estate business has been over the past 4 years. With 30 branches and 700 agents across central Indiana, we know alittle something about this business.
    • Sure Hope So
      I agree with Mr. Caveness. I'm surprised to see homes still selling in our neighborhood at prices that don't seem discounted. People will always need a place to live, and our country is in love with homeownership (for good reason). It is part of our national identity, as is our love of cars - as compared to the European passion for public transportation. A house is still a great investment provided you take care of it, and take care of your neighborhood.

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