Are we there yet?

Yesterday's New York Times article on housing provides further evidence that the housing market it beginning to recover. You will recall that in my last posting, I also saw signs of recovery in my neighborhood.

Now there is some objective proof being offered: the Case-Schiller Price Index reports that 8 cities including Chicago have shown increases in the price of homes, while 20 major cities are flat-lined. Further, new home sales rose in June. The measure of recovery of the housing market has been established by actual increases in the prices of homes that have sold recently as compared with the prior month or quarter. In many areas of the country, the prices of homes have not declined in the past month or quarter, and this too, is offered as proof of recovery.

In order to keep the housing market market moving, banks and other mortgage lenders are offering loans under 5%! For instance, First Sterling Mortgage in Chicagoland has a 15 year fixed rate of 4.875%, 5/1 ARM's at 4/375% and 7/1 ARM's at 4.625%. $1,000,000 loans require 25% down and $1,500,000 require 30% down.

In addition, the NAR (National Association of Realtors) is lobbying Congress to extend the $8000 first time buyer credit past its' November expiration and also asking that the amount be increased to $15,000. The beginnings of the market recovery are attributed to this credit.

On an individual level, many sellers are offering closing bonuses to buyers and their agents if their home is under contract by a certain date. Many developers are providing upgrades at no extra charge and are underwriting the costs of association dues or closing costs. Motivated sellers are doing what they can to entice buyers to select their home for purchase.

This concerted effort by the Government, business and individuals appear to be working. The Case-Schiller report provides some objective proof that recovery is under way. This good news has been long anticipated. We can finally begin to exhale.