While everyone was looking elsewhere -- chiefly toward the Persian Gulf -- the housing market in the United States began showing signs of a very nice and sustainable recovery.
Brokers around the country, who for the last two years have been as lonely as the Maytag appliance repairman on television commercials, now say that nibbles are turning into bites -- and they are reeling in the sales.
"It's a matter of pent-up demand," says a suburban New York real estate broker. "People held off as long as they could, then decided to go ahead and buy.
"It's a good time to buy, too. Mortgage rates have fallen. You can get a fixed-rate mortgage for 9 percent or even less. Coming out of a depressed market, there are a lot of bargains."
In short, conditions are right for those who want to buy a home. The selection is great, the prices are low, and favorable financing is available.
It's too early for anyone to say that the depression in the housing market is really past, yet you can't credit the upturn to either the spring season or lower mortgage rates, says another Realtor, Ceil Baring-Gould, a broker with Houlihan-Lawrence Realty Centers in Westchester County, just north of New York City. People are tired of waiting, she says. They are bored with the recession and have concluded life has to go on. The reports of healthier markets come from all regions of the nation. In some parts of the country, home prices on their way back up have reached the level they attained in the mid-1980s, when it was commonly believed that buying a home was an investment certain to pay off.
"I had a house on the market since last fall," said a New York broker. "There was no action on it, no interest shown at all, for six months. On one recent Sunday, four families looked at it."
Many such stories are being told. A house, on the market for months, suddenly sells, as buyers conclude mortgage rates and values are attractive. (Brokers say that now is not the time to drop prices, at the beginning of the spring market. If a house hasn't sold by April 15, you should consider reducing the asking price.)
How does this turnaround affect you? If you're looking to buy, the ramifications are obvious. A home of your own may now be within your reach. You can be more selective, in fact. There's a good chance that the home you want is available, in the location you want, at a price you can afford to pay. The usual caveats apply: be wary of buying in an area that in general faces an economic downturn, avoid nice homes in otherwise depressed neighborhoods, and make sure you have the home inspected for structural soundness and the presence of radon, termites and asbestos.
If you're trying to sell, your chances of success are increasing. But you should discard the normal rules of reducing the price after several months. It makes no sense to have held firm on price when no one was buying, then reduce it just as demand picks up. Instead, you should take extra care to make sure your home is attractive to prospective buyers. Remember, if you haven't had any serious offers by mid-April, you may want to lower your asking price so you don't miss the spring market. You may be competing with homes on which the price already has been dropped more than once.
The changing fortunes of the home market affect you if you own with no intention of selling, too. For more than a year now, some homeowners have been shocked to learn that they owe more money on their houses than the houses are worth. That unhappy trend is slowing or stopping as values edge back up.
While the market for single homes is getting better, commercial real estate is not. There is more commercial real estate in many places than there are businesses to use it. For the foreseeable future, say experts in that field, commercial real estate is no place to invest your money.