The stakes have gotten higher in the last few weeks. We’ve had a series of positive news releases; statistics are showing a strong turnaround in the housing market. Here are a few more… sales volume in my one real estate office nearly doubled in July ’09 over July ’08. We’re now at the point where in a few weeks the traditional Autumn selling season will begin, and the questions start to rise: will buyers come back after their summer vacations? Will we see continued support and recovery in the housing market on a sustained basis, or was the spring surge in sales simply a function of long pent-up demand bursting out briefly because of the $8,000 tax credit?
Economist Robert Shiller, he of the Case-Shiller Index, is a gloomster at this point. In a recent interview with CNN Business Correspondent Poppy Harlow, Dr. Shiller gave all sorts of reasons why the current uptrends in housing might be a mirage that will melt away in the desert heat of August. This interview, given before last week’s unexpected good news on slowing GDP losses and slight drop in unemployment, was based in part on the common wisdom of what these reports were supposed to be, not on the surprising results they actually gave. Which, in my opinion, only goes to show that economists have a tendency to trust their own predictions much more than anyone else does.
Certainly there are tough times ahead. But, there is a growing sense that the worst is behind us, and that is something that I believe is true. Now is the time for renewed investment in real estate, and for first time homebuyers to get in there and grab that $8,000 credit. Like “Cash for Clunkers,” its a government rebate that is working to give short-term and immediate stimulus to a devastated segment of our economy. It should be renewed to last into next year.
