Anyone anxious for a housing market turnaround got a bit of dreary news today, in the form of the most recent Case-Shiller Index report. It found that home values fell 3.8 percent nationally between January 2011 and January of this year, a greater decrease than expected.
In the West, though, there has been a trickle of good news lately. The Wall Street Journal recently singled out Phoenix for its strides toward recovery. Last week’s new home sales numbers showed the nation’s housing market to be “wobbly,” as the Los Angeles Times put it, but in the West, new home sales were up 8 percent.
Eric Allen, a regional director for housing market information provider Metrostudy, cautions that those numbers have a large margin of error. Nevertheless, he says, there are signs of a housing market turnaround in the Mountain West. “We are starting to see the consumers come back into the market,” Allen says. “People are starting to get back on their feet, and they’re searching for houses before prices and interest rates go up.”
As evidence, Allen points to the decreasing inventory of distressed homes in Boise and elsewhere in the region. He says home builders tell him that, little by little, demand is picking up.
Brookings Mountain West Director Robert Lang
doesn’t identify a broad, regional housing market recovery. Instead, he says, the cities in the West that fared the worst in the housing bust — Boise, Las Vegas, Phoenix — are beginning to reap the benefits of their dramatic falls.
“It is a competitive advantage to have cheap real estate when you’re recovering,” Lang explains. “[The market] is improving because prices have fallen lower than the intrinsic value — the land, labor and material needed to build a new house.”