Are We Turning a Corner?

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Senior Editor Bill Lurz can see the signs of a possible housing market turnaround.

May 23, 2008

In our first Feb. 7 issue, I speculated a series of factors would contribute to ending the current housing slump "in the blink of an eye." Today, there are signs, and I'm not the only one who sees them.

The truth is, most housing markets across the country have already bottomed. We'd be able to see it better if the four hardest-hit states were removed from the pool of national data and anecdotal evidence. Florida, California, Arizona and Michigan contribute more than their fair share of horror stories and will be the last to stabilize. But just in the last couple of weeks, reports of impending housing recovery began to trickle across my desk.

For example, The Kiplinger Letter — that venerable, Washington, D.C.-based trend forecast newsletter for investors — reported in a mid-April edition that home prices are climbing in cities including Houston, Salt Lake City and Oklahoma City. "More buyers won't wait much longer to try and catch the absolute bottom price. With mortgage rates at low levels ... qualified buyers are pulling the trigger," the editors wrote.

A couple of weeks later, The Wall Street Journal included an opinion piece by Cyril Moulle-Berteaux, managing partner of Traxis Partners LP, a Wall Street hedge fund. Moulle-Berteaux wrote that while home prices may not return to the heady days of 2005 for another 15 years, "the trend is no longer getting worse, which is the critical factor."

Has anyone else noticed the impending re-emergence of home buyers, perhaps among the largest builders? Just a few days ago, I got a press release from Centex Homes about two new appointments in the Central Florida Region (of all places) where the firm seems to be rebuilding its land acquisition capability. Maybe Centex is getting ready to shift direction on land?

I think you'll see more of a housing market with each passing day.

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