Tags: housing | recovery

Green Shoots in Housing? Not So Fast

By Marc Davis   |   Thursday, 03 Sep 2009 10:04 AM

Homebuilders have been wrongly predicting a housing bounce-back since the market topped in 2006.

And, despite signs of a resurgent housing market, skeptics say they’re wrong again now, writers Fortune magazine's Colin Barr

"They argue that a deeply indebted consumer, a weak job market, expiring incentives and rising foreclosures spell a quick end to any housing rebound."

"We're entering the phase where the homeowner has to earn his way out of this mess," said Mark Hanson, who runs a California real estate research firm," quoted in Fortune.

New home starts continued a five consecutive month increase along with an almost 100 percent increase in share prices of the exchange traded fund that holds major home builders.

Among builders whose share prices have gone up in tandem with the sale of new homes — at sales numbers not seen since last September — are Toll Brothers, Hovnanian, and KB Home.

Home prices are also on an upward march, according to the Case-Shiller index of national house prices, which reported a 2.9 percent increase in Q2, the first turnaround after three years of price erosion.

With the home building sector apparently regaining health, industry executives believe the worst is over, says Barr.

"We believe declining cancellations and more solid demand indicate that the housing market is stabilizing," said Bob Toll, Toll Brothers CEO, in a conference call to investors and analysts.

Richmond Federal Reserve President Jeffrey Lacker agrees.

The shattered housing market will no longer be a drag on economic activity, he told the Danville Register and Bee.

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Homebuilders have been wrongly predicting a housing bounce-back since the market topped in 2006. And, despite signs of a resurgent housing market, skeptics say they’re wrong again now, writers Fortune magazine's Colin Barr"They argue that a deeply indebted consumer, a weak...
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2009-04-03
 

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