April 7, 2009

THE CENTRAL TRUTH ABOUT THIS "CRISIS THAT CHANGES EVERYTHING"....:

The American Suburb Is Bouncing Back (Joel Kotkin, 04.07.09, Forbes)

Although the economy is still hurting, the housing trend has become much more positive. Statewide, existing home sales have jumped 30% over the past year, taking the inventory from an estimated 16.7 months to less than seven months. In Chino Hills, it is down to six months.

Most encouraging, this activity is taking place exactly where the market was hit hardest in the beginning--in the suburbs and at the lower end of the market, which in the Inland Empire means between $150,00 to $300,000. This could presage the resurgence of the suburbs and the prospects for the middle- and working classes once again to purchase their piece of the American dream.

Nor is this merely a Californian phenomenon. Nationwide, existing home sales--predominately in the suburbs--have been on the rise for the last few months. The strongest growth is occurring in Sunbelt markets in Arizona, Nevada and Florida, as well as in California. These places experienced some of the greatest surges in prices, which forced many buyers to turn to subprime and interest-only loans.

These loans are largely not available today, Guerrero notes. Instead of financial quackery, lower prices--sometimes as much as 50% below peak--are allowing new buyers to buy affordably. In 2007, Inland Empire median house prices were roughly seven to 10 times the average annual income of potential buyers. Now they are settling close to the historic norm of three times.

But not everyone will be happy to see life return to the suburban housing tracts. Indeed, for some self-proclaimed urbanists, planners and pundits, this development might seem almost nightmarish.


...is that a year from now nothing will be different than it was a year ago. Historic trends don't end just because of technical glitches in the markets.

Posted by Orrin Judd at April 7, 2009 7:40 AM
blog comments powered by Disqus
« WELL, HE DOES LONG TO BE THE GIPPER...: | Main | »