Signs the Housing Market is Recovering

If you want to know what direction the housing market is heading, watch what developers do.  It’s a given.  When builders, who spend millions analyzing future housing demand and economic conditions, start to believe that now is a good time to build, well you probably should take some stock in their actions.  You will surely be witnessing the housing market recovery in its neonatal stages.

According to a government report issued this week, the pace of new home construction surged to a four-year high in September.  The National Association of Home Builders said its October survey of members found confidence among builders at the highest level since 2006.   Builders are beginning to jump of the fence and build houses to accommodate future demand.

 “Builders started work at an annual pace of 872,000 homes last month, up 15% from the pace in August. They also filed for permits to build homes at an annual rate of 894,000, up 11.6% from the previous month. Both readings were the best since the summer of 2008, before the meltdown in financial markets that caused home lending and building to freeze up “according to Cnn.com

What exactly are the forces driving builders?  It can largely be attributed to record low interest rates and the promise by the Fed to hold rates low for months to come.  A drop in unemployment and growing demand for housing has also contributed to builder confidence.  All of these factors have also been driving the San Diego residential home resale market for most of 2012 making competition for good homes fierce.

Don’t take my word for it.  Talk to your neighbor or a friend or relative who’s in the housing market.  They will tell you the demand/competition for a good home, at a fair price, has never been greater.  But they’ll also say, their payment for such as home, has never been smaller.  I truly hope if you have means and the desire to enter the San Diego Housing market you will.  Not for my sake but for yours.  Southern California real estate is a solid investment and with record low pricing and interest rates, there truly has never been a better time to start building wealth.

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