Most real estate analysts are rather bullish on the housing market right now. Sales, pending contracts, prices and new construction starts are all up. The Home Price Expectation Survey released last month revealed a sense of optimism among the experts surveyed regarding home values over the next five years.
However, not everyone is buying into the belief that housing is in a full-out recovery. There are still a few bears who do not believe housing is out of the woods just yet. One such bear is Radar Logic. In their RPX Year in Review released last week, they shed new light on two data points which have recently shown improvement.
“From November 2011 to November 2012, the RPX Composite price increased 9.2 percent year over year, but this increase reflects a significant shift in the composition of home sales and overstates the appreciation in individual properties.”
“An increasing share of sales activity has been driven by institutional investors rather than households. While the 25-metro-area RPX transaction count increased 7.6 percent year over year, monthly investor purchases increased 75 percent year over year. The bulk of these purchases occurred in a handful of markets hit particularly hard by the housing bust: Miami, Phoenix, Los Angeles, Las Vegas and Atlanta.”
Radar Logic concludes:
“Some commentators suggest that investor-driven home price appreciation could spur demand among housing consumers, which will in turn bring about a broad-based and sustainable recovery in the nation's housing markets… It is hard to see a direct connection between the current increase in institutional demand and future gains in household demand, especially at a time when traditional buyers are faced with high down payment requirements and tight standards for mortgages.”
It will be interesting to see whether the few bears are correct or if the bulls, who are definitely in the majority, are proven correct.