Upbeat News

Good news on housing seems like an oxymoron to most people but today brought two examples. The front page of the Wall Street Journal carries a story, “Stunned Buyers Find the Bidding Wars on Back.”  Yes, the Journal blames the competition on a supply shortage rather than excessive demand, but if there’s anything likely to make buyers accept higher prices, it’s losing a deal to another buyer.   Likewise, if the house down the street sells above the asking price, the next one put on sale will be at a higher asking price.  If this spreads it could possibly spark somewhat higher prices.  The second piece of news reflects much of the recent data on housing starts but is more comprehensive.  The first quarter GDP report, released this morning, shows that residential construction rose at a 19% real annual rate in the quarter adding 0.4 percentage points to the 2.2% real GDP growth for quarter. Housing is making its traditional recovery contribution.  These good news items don’t guarantee we are about to see a housing rebound. But combined with some other upbeat news including the somewhat better year-over-year figures in the last S&P/Case-Shiller Home report for the 10- and 20-city series and improvements in starts and sales, suggests that the upturn may not be years away.

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