Sales are picking up in markets where prices are deflated, but the business is different than it was before the bubble burst, observers say.
The housing market in deflated markets–like Arizona, California, Florida, and Nebraska–are beginning to show signs of a rebound. Analysts say that prices have fallen to the point that those with average salaries can afford to buy once again.
“The buyers are returning,” says Lawrence Yun, National Association of Realtors chief economist. “And in such a strong way that, now, we are hearing in some cases there is multiple bidding, which hints that maybe pricing is reaching a bottom point. But inventory remains high.”
In California’s San Joaquin County, sales in September and October reached sales levels about equal to business at the height of the boom in 2005, says DataQuick, which provides property data.
But new buyers are primarily first-timers and investors looking to cash in. Local practitioners say the buyers are primarily local residents who have cash to spend.
“It’s the couple down the street that has a nice nest egg and who wants to put it into something that will give them a good return,” says Bev Marlow, head of the Central Valley Association of REALTORS®.