The latest housing market report by RadarLogic contained said, while trends in home prices remain negative in most major U.S. metropolitan areas, there are indications that market conditions are starting to improve.
Falling home prices are a result of “a persistent imbalance of supply and demand in the housing market”, according to the report. However, the report goes on to say that there are signs that supply and demand are beginning to improve. Demand appears to be increasing, with sales in the 25 metropolitan areas covered in the report, posting a 15.4 percent year-over-year increase in September, the largest September-to-September gain since 2003. Inventories are trending down, with the Realtors reporting a 13.8 percent year-over-year decline in existing-home inventory in October and the Mortgage Bankers Association reporting a decline in distressed inventory from 13.52 percent of mortgage loans in October 2010 to 12.42 percent of mortgages in October 2011.
Based on these trends, Radar Logic expects the year-over-year trend in U.S. housing prices to remain negative for some time, but the rate of decline will slow until prices finally touch bottom.
“We may indeed being seeing the beginning of at least a ‘soft landing’ in housing,” said Michael Feder, President and CEO of Radar Logic. “Activity is stable, price declines have slowed and it is unlikely that many more borrowers will enter default or that many more homes will go ‘underwater.’ While this may not be the beginning of a recovery, the data suggest it may well be the beginning of an equilibrium, which if the case, should and probably will boost buyer confidence. If it does, a recovery may not be far away.”