The US Real Estate market has been in decline for almost 3 years. Despite what many analysis believe will be a slow recovery, there are signs that 3 years of pent up demand and current low interest rates can start a very fast recovery.

The economic environment is going to get better based on the stimulus packages and the Fed easing. This will intern provide the fuel needed to propel the depressed US real estate market forward very quickly.

An example can be seen in Canada, while in the middle of a recession, Canada is also experiencing a major housing boom. Low borrowing costs, more affordable prices in many markets and some pent up demand after the fall and winter sales freeze provided heavy-duty support for housing. The Canadian national residential average price in May reached the highest monthly level on record.

The major factor holding down the US real estate is liquidity; preventing many would be homebuyers from getting the financing they need. Once liquidity is available to the US market, the homes sales will have all the ingredients needed to propel the US real estate market higher much like the Canadian market.

Signs are already starting, the National Association of Realtors said that sales jumped 7.2 percent to an annual rate of 5.24 million units, the highest since August 2007, beating market expectations for a 5 million unit pace. Sales were at a 4.89 million pace in June.

July’s percentage increase was the largest monthly gain since the series started in 1999 and marked the fourth straight monthly advance. The last time sales rose for four consecutive months was in June 2004, the NAR said.

This entry was posted on Friday, August 21st, 2009 at 6:53 pm and is filed under Real Estate Market Analysis, US Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.