Tags: Zelman | housing | tide | changed

Ivy Zelman: ‘Tide Has Changed’ in Housing Market

Thursday, 27 Dec 2012 09:19 AM

Home prices, which could post their first yearly gains since 2006, have finally turned a corner and are on their way to more sustained recovery, said Ivy Zelman, chief executive of research firm Zelman & Associates.

The Standard & Poor’s/Case-Shiller 20-city home price index rose by 4.3 percent in October from the same month a year ago, beating many market expectations.

While prices have improved in fits and starts in the past, this time it appears the sector is making sustained recovery.

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“The tide has changed,” Zelman told The Wall Street Journal.

“People feel it’s OK to go back into residential real estate — it’s no longer taboo — and that change in sentiment could have a very powerful effect.”

Prices are rising as demand has picked up and inventories have declined, enticing many homeowners looking to sell back into the market.

Meanwhile traditional buyers, those who buy homes to live in them and not turn around and flip them, are back as well.

“People got tired of living in mom and dad’s basement, and rents have gotten much higher than your mortgage payment,” said Glenn Kelman, chief executive of real-estate brokerage Redfin, The Journal added.

Other experts point out that the housing sector is showing marked improvement over its choppy performance earlier.

“It is clear that the housing recovery is gathering strength,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, which manages the Standard & Poor’s/Case-Shiller price indices, said in a statement.

“Higher year-over-year price gains plus strong performances in the southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy.”

The Commerce Department recently reported the U.S. economy grew 3.1 percent in the third quarter, up from a preliminary estimate of 2.7 percent.

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