After the 2008-2009 financial crisis, many industries struggled to recover to pre-recession numbers. The housing market, along with many other markets, took a serious hit and hasn't been able to fully recover from the recession, but it may have finally turned a corner.
The sale of mortgage products appears to have improved in the past several months, which is good news for potential homebuyers. But there is one aspect of these sales not being considered. If the big picture was truly analyzed, things are not quite as rosy as they seem, at least for sellers.
Listen to the full podcast by clicking here. A full transcript follows the video.
This podcast was recorded on 11/30/15.
Gaby Lapera: So speaking of products, particularly mortgage products, pending home sales were up 2.9% from last year in October and they rose about .2% from September this year, which is less growth than was expected. But growth either way is a good sign, right?
John Maxfield: Yeah, I mean, in terms of the volume it's absolutely a good thing, yeah.
Lapera: Yeah, I mean, typically people don't buy homes if they're feeling economically insecure. So this is a sign that people are, have faith in the economy as it is now and that they're getting ready to settle down and plunk down roots. Did you also see, I don't know if you saw this, an article a little bit ago about the Case-Shiller index, which is -- it's basically an index that tracks home prices. And it said that home prices had reached pre-recession levels again and they're just far too expensive. But that doesn't really take into account inflation, and there's a new analysis released by CoreLogic and it says that homes have not reached pre-recession level when you take into account inflation.
In fact, they're about 20% below what they were pre-recession when you account for inflation. And they're thinking that it will take 17 years to reach the same price point. So it's good news if you're thinking about buying a home.
Maxfield: Not if you're thinking about selling.