Trulia’s chief economist Jed Kolko said that although the housing recovery was “for real,” the price rises in many major markets were simply a rebound from the dark days of the housing bust. Speaking in an interview on Bloomberg News, Kolko said that strong job growth was increasing household demand, leading to an appreciation in house prices.
“What we’ve seen is a big shift of sales away from distressed properties to conventional properties,” Kolko said. “That’s a healthy thing for the market.”
Addressing the question of shadow inventory, Kolko said that it was localized in markets such as New York and Florida, places which have a lengthy foreclosure process. “In the rest of the country, most of the foreclosure crisis is behind us.”
Nationally, he said, it is roughly 44 percent cheaper to buy than to rent. However, he added, “the line is actually much closer in places like Manhattan.”
Foreign investors will continue to be players in the market, he said, noting that Trulia had seen significant online search activity from abroad, particularly in New York, Florida and Southern California. [Bloomberg News, via YouTube] –Hiten Samtani