The debate rages over whether housing has found the bottom. Of course, the debate will continue because markets are localized and segmented by price ranges and neighborhoods. While existing home sales were down in March, they outpaced last year’s number. Home prices are showing signs of stabilization but an unexpected drop in inventory could be holding the number of sales back. With low interest rates, impressive affordability levels and an improving economy the demand is present, there just simply are not enough homes on the market to meet the demand. In the luxury home market, this is not yet the case. Inventory remains high and prices are still under pressure. However, what happens in the low and average price ranges usually filters up to the top end of the market. With time, we will likely see inventory drop in the luxury market and the prices stabilize. The next wild card will be whether banks can succeed in short sales, holding homes as rentals and generally controlling the supply of foreclosures placed on the market. If we don’t ever see a so called “2nd wave” of foreclosures, then prices have bottomed! Only time will tell, but it sure is nice to be debating the housing bottom.
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