More Signs of Stabilization

"It is good to be greedy when others are scared and good to be scared when others are greedy"
-Warren Buffett
More good news today about the strength of the real estate market and another good reason for buyers and sellers to get together:

The number of Americans signing contracts to buy previously owned homes jumped in March for the first back-to-back gain in almost a year, reinforcing signs that the housing slump in its fourth year may be near a bottom.

Over the past two months we've seen prices begin to stabilize, and the number of homes under contract increase. The old adage that you don't know where the bottom is until you've been there will hold true. While prices in some areas are low the pace and amount of the discounts is slowing and sales are beginning to rebound. There is still a lot of inventory out there and it will take time for the market to absorb it but the best homes are starting to be shown more often and offers are coming in.

The National Association of Realtors' Housing Affordability index has never been higher. Rates on mortgages are still very close to their all time despite the recent increase in Treasury bond yields. Eventually, mortgage bonds will have to catch up and mortgage rates will increase.

The best indication that things are improving is two consecutive increases in the index of consumer confidence. For most of the 1st quarter of 2009 everyone was petrified that the recession would deepen and bread lines would not be far off. We are seeing an improvement in most sectors of the economy and even new unemployment claims are starting to abate.

We are not going to see a return of 2004 anytime soon and that is a good thing. Steady, justifiable growth, -that is the goal.