Another interesting way to measure the success of the housing recovery is to see how many markets have returned to normal. If we see a rise in the number of “back to normal” cities that means, apparently, that the recovery is progressing.
Now let’s see if that theory holds up.
The number of back to normal places has been on the rise. And last month the rise stalled. No more cities were showing pre-crisis numbers of home values or foreclosures. So the National Association of Home Builders says things aren’t progressing so well. And they add that maybe demand will rise as potential buyers get their act together.
What this kind of survey doesn’t take into account is the strength of growth. How much improvement has there been. Are cities recovery levels higher than they were. It really doesn’t matter to me if no new cities are added to the list if the ones already on it are showing growth above and beyond pre-crisis levels, which they are.
It’s really not just about how widespread the recovery is. As I’ve instructed my students from the beginning you don’t need every city to be back to normal. You just need to find the right cities, the ones with the strong fundamentals. That’s where the money is. Land yourself in one of those and you can forget about the rest.