Good news from the Standard & Poor’s Ratings Service with regards to the housing recovery—after several starts and stalls, the housing market now seems in full rebound mode. That was the takeaway from S&P’s Housing and Commercial Real Estate Roundtable earlier this month.
According to Mortgage Daily News, staffers from S&P cited the consistent rise in home prices as the No. 1 sign the recovery is “for real” this time. They noted government intervention through tools like tax credits helped to provide a false recovery in 2010. However, as one senior director for S&P told Mortgage Daily News, “Rising prices are a good cure for a lot of headaches.
“Prices also provide a good summary of the broader housing market,” said Erkan Erturk.
Home prices were up 6.8 percent nationwide in 2012 and are expected to increase another 8 percent this year.
“There were a few false recoveries in 2010, driven by tax credits and other government supports,” Ertuk continued. “2012 was a significant year—the recovery was strong and the turnaround came faster than we’d anticipated.”
S&P officials pointed out several other positive signs that are defining the housing recovery. The most important of these is perhaps the continued reduction of shadow inventory, which is defined both as real estate properties that are in foreclosure and have not been sold or homes that are delayed being put on the market until prices improve. In fact, a continued increase in home prices is expected to put about two million homeowners into positive cash equity positions and potentially back in the market in the coming months.