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Has the housing market hit bottom?

June 29, 2012 12:00:00 AM PDT
According to the National Association of Realtors, there are currently less than 2.5 million homes for sale across the country. That's a drop of 20 percent from last year and an indication that the housing market may have finally hit bottom.

In May, home sales were up, jumping nearly 6 percent nationally and up a whopping 14.5 percent in the west. That's the highest level in more than a year.

Richard Green, director of the USC's Lusk Center for Real Estate, says rent has gotten so high it only makes sense to buy.

"We're seeing rents rise pretty dramatically in Southern California," Green said. "So if you look at the financial trade off between owning and renting, owning looks better now than it's looked in a quarter of a century."

So what are renters buying right now? Homes priced between $250,000 and $500,000. That's up nearly 29 percent from a year ago.

Another sign of a bottoming market is new home sales. For the past several years, home construction has been dreadfully slow, but it appears that's about to change.

Homebuilder Lennar has reported a 40-percent jump in new orders.

"We're really not building home and trying to change the way people live. People are living this way and now we're building homes for the way they're already living," said Greg McGluff, a division president with Lennar.

Along with record low interest rates this is all good news, for now at least.

"I'm less fearful than I was a year ago," said Green.


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