Two reasons for optimism about a local housing recovery

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?