Stabilizing Housing Market

http://www.nytimes.com/2012/05/10/business/fannie-mae-profit-signals-a-stabilizing-housing-market.html?_r=1&ref=business

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"I'm not an answering machine, I'm a questioning machine. If we have all the answers, how come we're in such a mess?" (Douglas Cardinal)
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According to Annie Lowrey,"Across the country, there are signs that the housing market is stabilizing. Home prices have continued to fall, but at a much slower pace. More Americans are buying houses than they were a year ago. Housing starts have climbed more than 10% in the last year, as home builders pick up construction of new homes and apartment buildings. Fannie and Freddie, which own or guarantee millions of home loans, lose money when borrowers default."

Locally, the rebound in the North Texas housing market continued in April with an 11% rise in pre-owned home sales over April, 2011 according to numbers released Tuesday from the Real Estate Center at Texas A&M. And, median home sale PRICES were up 9% from a year earlier.

That's the tenth month in a row that home sales were higher than in the same period of the previous year.

This has to connect back to "jobs." According to Richard Fisher, president of the Federal Reserve Bank of Dallas, as of March, the DFW metroplex had recovered about 99% of the jobs lost to the recession.

Using a slightly different methodology, the U.S. Bureau of Labor Statistics (BLS) had DFW still missing 10,100 jobs as of March. Of the 12 major metro areas tracked by the BLS, only Houston and Washington, D.C. had surpassed their past jobs peaks as of March. DFW, with a 94% recovery rate, is the closest to full recovery among the remaining 10. The next closest is Boston with a recovery rate of 69%.

Other cities in Texas have already passed their pre-recession peaks. Austin is already 4% ahead, and Houston is 34% ahead. DFW has a higher percentage of finance and insurance companies than other major Texas cities, and those two sectors were hit especially hard during the downturn.

Back in the DFW housing arena, a tighter inventory of homes listed for sale in 2012 is also causing prices to rise. In April, there were 24% fewer single-family homes for sale. And, there was only a 5.5 month supply of houses on the market. Before the recession, most economists were in agreement that a 6 month supply of homes was the norm for any housing market.

Another positive sign is job postings. The Labor Department said yesterday that U.S. companies in March posted the highest number of job openings in nearly 4 years. That would be the most since July, 2008. If we use the low number of all people unemployed as of March, 12.7 million (some people are still using 13.7 million), that means an average of 3.4 people competed for each open job. While that's far better than the nearly 7-to-1 ratio when the recession ended, in a healthy job market, the ratio would be around 2-to-1.

So, there are some positive indicators.