Looking for signs…..

Newly released stats show that signed sales contracts were up for the seventh straight month in August. Construction spending also took an unexpected rise for the month of August displaying the biggest jump in housing activity in nearly 16 years. Is this sign that the housing market is recovering from a four year slump?

Sales are being fueled by a tax credit of up to $8,000, low mortgage interest rates, and cheap prices on forclosure properties. However, the tax credit is expiring on Nov. 30th and it is unclear if lawmakers want to continue to subsidize the market. Can we turn that into a positive sign, that the government thinks the market can stand on its own two feet?

In all but a few cities home prices are slowly starting to rise, reversing a 3 year decline. And for us here in the west, this is the really good news: Pending sales are up – 16% in the West, 8% in the Northeast, 3% in the Midwest and nearly 1% in the South. Pending sales are the current escrows trying to make it to close, of course not all will. But this nonetheless, can only been seen as yet another sign for improvement.

The reality is that housing experts are divided on whether price gains signal a definite bottom to the worst housing downturn in decades or just a brief respite from falling prices. Time will tell and we will continue to watch for signs.