Is the real estate market coming back yet? That seems to be a common question these days. While money still seems to be tight, there is some movement that would indicate to me that we could be seeing the early signs of a recovery in some areas. That would make sense, as we would expect the prime markets to lead us in a recovery.

According to Neil Shah and Nick Timiraos, The Wall Street Journal; neil.shah@wsj.com:

Real-estate markets are showing signs of life as falling prices spur buyer demand, lifting home sales and new construction from the depressed levels of the past three years. The spring selling season, traditionally the busiest period of the year, appears to be off to its best start in five years. Sales of existing homes in January and February were at their highest level since 2007, according to data out Wednesday, though sales in February edged down by 0.9% from January on a seasonally adjusted basis. the decline in real-estate prices has slowed its pace, making Americans less cautious about spending and potentially more disposed to buy a home.

For the first time since 2005, investment in residential real-estate, including home building and renovation, has contributed to U.S. economic output for the past three quarters.

(Read the rest of the article here)

As we move forward through the year, we should see if this shapes up to be a true recovery. Looking forward, I would expect any recovery to be lengthy, and it could be some time before it reaches some of the hardest hit areas, but a recovery has to start somewhere.

There is still a good sized inventory of distressed homes on the market and coming to market, which may continue to depress the hard hit locations, but with new loan programs being rolled out and other recent events we may really start to see this ease up here in the near future. With a better real estate market, we can likely also look forward to a better overall economy.