Winans Investments: U.S. Housing Bear Market Has Ended but Changes in Tax Law Could Dampen Recovery

NOVATO, Calif., Nov. 30, 2012 /PRNewswire/ -- If history is a reliable guide, then we have entered the beginning phase of a housing recovery! The question now is how strong will the recovery be?

Winans Real Estate Index (New U.S. Homes)

 Percentage Change Since December 31, 2010:








U.S.                 

West               

Northeast       

South              

Midwest







Price               

3%

4%

1%

5%

17%







Sales               

26%

33%

50%

25%

10%







Listings                       

(23%)

(26%)

(31%)

(19%)

(22%)







Housing Inventory  = 5.1 months       

Median Number of Months For Sale = 5.9 months    

All regions of the U.S. have seen increases in new home prices, sales, and a 40% decline in inventories over the last 24 months. During the real estate slumps in 1968, 1981, and 1990, sales increases and housing inventory decreases were important signs that sustainable price increases had returned to the housing market. But, the taxman could ruin the recovery!

"While new housing price advances and high sales activity are encouraging, credit conditions are still problematic. Past real estate bull markets started when the average time it took to finance and sell a new house dropped below 3 ½ months (i.e., easy credit). Currently, it is taking nearly 6 months on average nationwide. To make matters worse, the possible loss of the mortgage tax deduction could further limit credit to potential buyers of higher-end properties. With these financial headwinds, I don't see a robust nationwide housing boom anytime soon," says Ken Winans, award-winning author of Investment Atlas (www.investmentatlas.com).

For the record: This is officially the longest residential real estate bear market since World War II; however, this home value slump of 23% is not record setting. The worst decline of U.S. new home prices in the last 150 years was the 68% decline from 1929 to 1932.

The Winans Real Estate Index (WIREI) measures U.S. new home prices from 1830 to present day. More information on the Winans Real Estate Index can be found at http://www.winansintl.com or www.globalfinancialdata.com.

www.winansinvestments.com

SOURCE Winans Investments



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