May’s 6% jump in signed contracts to buy existing homes is a welcome sign of returning blood flow to the housing market, which has been on death’s door for a few years now. It may be too early to say “the recovery is nigh,” but since I am basically a Pollyanna, I will say it: “The recovery is nigh!”
In case you are not up on your archaic English, nigh means near or almost. So you can still take it with a grain of salt if you wish, but it is my fond wish and belief that it is nigh.
You can also take note that the archaic definition of “fond” is foolish or silly. Be that as it may, a number of signs and portents point in the direction of recovery. New home sales are up, affordability is up, mortgage rates are at record lows and inventories are down to a point where home builders may actually have to increase production to keep up.
Signed contracts were up 14.5% in the West, driven in large part by investors buying distressed properties. Many will convert them to rentals. The rental market is strong. Many investors, no doubt, hope to have a capital gain in the future, figuring prices will rise. This is known as the “bottom-feeding” play.
Difficult days are still ahead for real estate. But it is my fond assessment that the worst is behind us.
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