How the real estate market will fare in the spring home-selling season will prove a test for housing demand and show which markets will lead a housing recovery, economists say in a recent article at USA Today. The spring selling season usually runs March through June.
“This spring will be the litmus real estate test for housing demand,” says Steven Ricchiuto, chief economist for Mizuho Securities USA.
The sluggish housing market in recent years, which has seen a flood of foreclosures and falling home values, has been inching toward a turnaround in recent weeks. Existing-home sales and pending home sales are up about 9 percent compared to the same time year ago, according to February housing data by the National Association of REALTORS®.
Paul Dales of Capital Economics told USA Today that he expects the spring selling season to “be the best in four or five years” for the real estate industry.
Economists predict that where the housing supply of for-sale homes has dropped the most and is more balanced is where prices have the greatest potential of gaining this year. For example, Phoenix has had a 42 percent drop in its housing inventory recently and is projected to see prices gain 5 percent this year, according to Eric Fox, an economist for Veros Real Estate Solutions.