The real estate market has been turned upside-down. In most parts of the country, it is more affordable to buy a home than it is to rent one. However, an uptick in the asking price of for-sale homes may presage a recovery of the housing market looming just around the corner.
Asking price rises 1.4 percent
Trulia Price Monitor, released Thursday by the real estate listing site, found that the asking price of for sale homes in the U.S. rose by 0.6 percent in February and another 0.9 percent in March. The report looked at real estate stats in 100 metropolitan housing markets. In all, asking prices climbed by 1.4 percent in the first quarter of 2012 compared to the final quarter of 2011.
Similarly, The Burns Home Value Index determined last week that the asking price of for sale homes had risen by 1.1 percent in the year’s first quarter.
Stats seasonally adjusted
The figures recorded in the Tulia report are seasonally adjusted, taking into account the normal spring-time uptick in home asking prices. Unadjusted, the report would have shown a growth of 2.4 percent over quarter four of 2011.
Dramatic rise in areas hardest hit
Kolko said that the year-over-year leap in asking prices is especially dramatic in areas hit the hardest by the housing crisis such as Fort Myers, Fla., Phoenix, Pittsburgh and Detroit.
Real-time monitor of housing market
Other bellwether firms use the cost of homes sold to monitor the housing market. According to Jed Kolko, Trulia’s chief economist, looking at the prevailing asking prices provides a more “real time” gauge of the industry. Asking prices predict the cost of homes sold two or three months into the future, said Kolko. Therefore, the uptick, should it continue, could indicate coming growth in the national housing market.
A continued optimism in the housing market is echoed, says Kolko, by growth in the construction industry. He said:
“Builders build when they expect prices are going to rise.”
Rental demand rises in some areas
Some areas saw a reduction in home asking prices, such as cities like Seattle, Wash., and Sacramento, Calif., where superior job growth has driven up the demand — and, consequently, the cost — of rentals.
The Tulia report also found that the price of rentals went up nationally by 5 percent over the previous quarter.
A long way yet to climb
While the report hints that industry growth could fuel a recovery, the market still has a long climb ahead. The average cost of a home is still about 34 percent of what it was in 2006, before the collapse.