Reading mixed signals from real estate


Obama will do something soon to make sure any good numbers turn south.
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There’s a long-held notion that if you want to get a read on where the economy is heading, take a close look at the real estate market. During normal periods of stable growth, residential real estate is a driving force for the accumulation of wealth and savings for a broad cross-section of American families, while the commercial market is a vital source of revenue for everyone from investors and bankers, to builders and manufacturers. Conversely, when the real estate bubble bursts – as it so memorably did in 2008 – the effects can be dramatic, pervasive, and leave a lasting impression.

So, as recent reports touting resurgence in the housing and real estate sector fall under scrutiny, those on the sidelines are left to wonder whether it’s time to buy into the economic recovery. Most perplexing – when searching for answers on the state of the market and how it stands to effect the overall U.S. economy – is that experts seem to be decidedly split, offering perspectives as polarizing as the Continental Divide.

Buoyed by reports of housing price increases of 4 percent to 5 percent in 2012, enthusiasm for the recovery continued to gain steam as Freddie Mac recently predicted the sunniest spring outlook for the U.S. housing market since 2007. With interest rates still historically low, new starts on the upswing, and inventory levels tight, there are many indicators that support optimistic predictions for 10 percent or more growth in the sector over the next 12 months. However, one doesn’t have to look far to find opinions that cast a much darker cloud over the long-term outlook.



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