Spring home sales are getting off to a "solid start," according to Wells Fargo Securities economists, who expect strong existing home sales this year and house prices bottoming out by the end of the first half.
"There is no question that sales are going to be stronger this year in the existing market," said WFS senior economist Mark Vitner.
He told NMN that he is encouraged about the housing outlook because of his talks with Realtors and home builders and WFS economic models.
"A lot of people believe the housing market has been stagnant," Vitner said in an interview. However, they may be surprised by how much the market has improved.
He noted that a lot of potential sellers are holding off on listing their homes because of competition from foreclosures and other issues.
Vitner expects houses will sell more quickly this year and that will draw more reluctant sellers to put their house up for sale.
In addition, there has been progress in "whittling down" the shadow inventory, he said. And many of the structures are in such bad shape that they can't really compete with well-maintained homes.
"The seller is in a lot better position than they realize today," Vitner said.
"Unfortunately, conservative appraisals and tight mortgage underwriting" will continue to undermine sales. However, that should "subside over the course of this year," according to the latest WFS Housing Chartbook that was released Monday.
Vitner stressed that the housing outlook is getting better but there are still issues that need to be resolved.
"It is going to be a little bit better this year and next year we will see substantial improvement," the WFS senior economist said.
