Do a couple of good months a rebound make?

Real estate agents are, generally speaking, an optimistic bunch. Their rose-colored glasses are always at least half full of hopefulness. That is the salesperson in them, but it bubbles over into their after-hour conversations as well. Over recent days, I have spent numerous hours on web site discussion boards frequented by realtors, and I found few discouraging words about the near-term prospects for the residential housing market.
This was typical: "In the San Antonio (TX) area, we are seeing the investors from out of state starting

"Market activity has increased dramatically over the past two months," wrote a Raleigh realtor.

to come back. There is much more activity overall than just a month ago. Investors and homebuyers are realizing this is a great time to buy, with lots of inventory, motivated sellers and great rates."
   "In my area, homes are still seeing appreciation -- and the ‘overstocked' inventory that was on the market over the past year is decreasing," wrote a Raleigh, NC, realtor. "Market activity has increased dramatically over the past two months."
   Even the prospects for newly built developments received shout outs. "We have seen traffic increase tremendously at a new construction site (55+ community)," wrote a realtor who sells near the Pennsylvania and Delaware state lines, "and I've submitted and received multiple offers [for properties]."
   All these rosy reports certainly fly in the face of the national media's gloomy reports and continually dismal economic data. But as one agent gently chided me after I asked about his bullish predictions for his island community in Florida in the face of economic chaos, "Real estate is local and....here the buyers we are working with are mostly local people."
   That sounds a bit too much to me like the movie The Truman Show. (Truman, who is played by Jim

There are some phenomenal buys out there, with circa 1999 prices attached to them.

Carrey and whose entire life is one big televised soap opera, eventually gets off the island.) There is a whole world out there with icky little inconveniences like unemployment, job security fears, and huge stock market portfolio losses. The consequences reach into every crevice of the nation, and reasonable people believe the worst is yet to come, including massive consumer credit defaults and a plummet in the commercial real estate industry. As for the defrosting of credit necessary to restart the economy, how many believe that bank CEOs who gave themselves $30 million bonuses after their businesses lost billions are really going to take any direction from Congress?
In the face of all that, it is hard to imagine any safe haven market, although there is little doubt that housing prices in some areas of the country sunk so far so fast that they are now attracting buyers once again. Are they false positives? Some of them will be. But there are some phenomenal buys out there, with circa 1999 prices attached to them. The recent spurt of buying activity could be a positive signal, given the reports of local real estate agents. Even eternal optimists are sometimes right.

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Thursday, 12 February 2009 10:07

Last Updated on Thursday, 12 February 2009 10:28

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