US house prices - the end of the start

All of us landlords are waiting to get some signals about when the current gloom and house price correction will lift. Interestingly I was reading in Citywire about the first tentative signs of recovery in the US housing market.
The article highlights that although largely obscured by a crushing Case-Shiller Index August report (published last week) that showed prices tumbling, a number of promising portents during the last month have rewarded eagle-eyed data watchers.
They show that in the last month, and in contrast to almost every analyst’s prediction, sales of newly built properties increased by almost 3%.
Builders had been cutting down on construction, dropping prices by an average of 9.1% in the year and waiting for that equalisation of supply, demand and opportunity that rescues a market. Some commentators believe a corner has been turned.
More importantly – since 90% of US residential real estate market activity concerns existing (or ‘used’) homes – volume in the rest of the market picked up too. There were 5.5% more transactions in September, 5.18 million units bought, the largest monthly gain in more than five years, and once again it wrong footed the analysts.

Stabilization - end of the start
A stabilization of the US housing market will represent the end of the start of the current financial crisis and put a floor under the turmoil that has struck many of the banks and financial institutions across the globe.

The US housing market has suffered a glut of new housing which the UK does not suffer from. However, our housing down turn started a good 12-18 months after the states and so we are someway behind them.

As history has shown and this crisis is no different, when America sneezes, the rest of the world catches a cold. Stability in the US housing market will represent at least a stabilization in the health of the patient, even if the return to a rude state of health is some way off.

Therefore, let's hope that the US housing market has turned a corner. If it has we are all a little bit closer to stability returning to our own housing market. And with the exchange of the pound to the dollar improving slightly, good news for those who trade forex, there's more reason for hope. However, landlords don't hold your breath - we still have a long way to go!