In June 2009 The Business Cycle Dating Committee of the National Bureau of Economic Research announced that the recession that began in December 2007 was officially over. Of course, that was a cruel joke to most Americans who were still suffering through the worst economic downturn since the Great Depression.
However, three years later there are unmistakable signs of improvement in our economy. This has stirred the great awakening in the housing market because housing is inextricably linked not only to the economy, but to the perception of what the economy will do in the future. There are many measures for this perception but the best is probably the Consumer Confidence Index (CCI). This index polls thousands of Americans each month and asks them how confident they are in the economy. Between 2007 and 2008 it plummeted to a level not seen since the 1970s. The level crawled along the bottom for four long years until last year when it started rising. As more good news began trickling out of the U.S. economy the CCI has grown at a slow but steady pace for the past 12 months.
What is causing us to come out of our shells and believe our economic future might hold some promise?
- U.S. unemployment is down to 8.3%, its lowest level in years. The past six months have been the best streak for employment since 2006. Colorado’s unemployment rate is down to 7.8%.
- The stock market is at its highest level since before the recession began, doubling in the past three years.
- The Fed has all but nixed the idea of QE3, meaning it believes the economy is on its way to recovery and won’t require another massive stimulus fund.
- The 4th quarter, 2011 GDP grew by 3%.
- Home foreclosure sales have dropped to a five-year low.
- According to the Case-Schiller Index the Denver real estate market is the 2nd best in the country.
Many would-be home buyers waited for years for signs of a stabilizing economy before jumping back into the housing market. With signs of visible progress over the past year, buyers are jumping back in and creating our super red-hot housing market. Take a look at the bold figures in our Quick Stats. The number of homes under contract is up 50% compared to this time year!
So, if you’ve been waiting on the sidelines or know someone who has been waiting, wondering when it will be a good time to buy again, you might want to start thinking about it. Our economy is improving, inventory of homes is at record low, interest rates are still low (but rising), and home prices have begun rising again. Give me a call and I’d be happy to share all this data with you.