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FEATURE to own versus renting, consum- ers will opt to buy. Additionally, throw a good shot at long-term house appreciation and you have the recipe for a housing market poised to move upward." "Housing numbers are looking better because there's less inven- tory, real estate attorney and co-founder of Oppenheim Law. "And therefore, based on the law of supply and demand, demand is staying pretty firm and thus prices are starting to inch up. And as long as supply continues to be constrained, then we would expect prices to either continue staying where they are or continuing to inch up slowly. Another explanation for the " offered Roy Oppenheim, a " uptick in housing is an increase in household formation. In 2007, household formation was 1.627 million with the average for 1998 to 2007 at 1.499 million. In 2010, household formation fell off the cliff to 357,000, a 78 percent drop from 2007 and off 76 percent from the prior 10-year average. There were several reasons for the sharp drop: a reduction in im- migration due to a crackdown on undocumented immigrants and to the Great Recession and resulting high unemployment, which in turn led to the surge of 20-somethings who were unable to get jobs and were living with their parents. Those dismal numbers began to "normal," we have a long, long way to go. I think it is more realistic to say that we are in the process of redefining what a normal housing market really means. Then we'll move towards that new normal. For Oppenheim, there's also a " contagion factor. "It looks like because inventory is dissipating that there's now new construction coming back, and builders are starting to buy lots and new homes are starting to come out of the ground again, so, that creates new excitement, and then excitement breeds anticipation, and that generally helps the entire real estate market. Also, it creates " he said. "And the current upswing in the hous- ing market is more than a pass- ing trend, conditions in the housing market appear to be consistently improving quarter after quarter. Key indicators of this improvement include home sale prices at record lows, interest rates decreasing, along with gradu- ally shrinking inventory. Buyers who once rented are now taking advantage of new opportunities to purchase homes. The result is a market where homes are selling " MacLean said. "The in our history to purchase a home." Brock MacLean, EVP of Homes Inc., agreed the numbers are "real." "Homes Inc. is confident that report, which he said found it is more economical to purchase a home than to rent property in more than 70 percent of U.S. cities including Detroit, Sacramento, San Antonio, and Jacksonville." "This is the first time in a long time it's been cheaper to buy than to rent, does seem counterintuitive to buy when many are victims of job cuts, decreased income, and more. However, the fact is, we've seen mortgage rates beat rental rates more often than not lately." " MacLean said. "It Regional Rebounds developer of real estate informa- tion and technology in the Mid Atlantic area. He pointed to real estate fundamentals: location, location, location. "All our information," Heithaus J ohn L. Heithaus is chief marketing officer of MRIS, a turn around in 2011. Blogger Bill McBride, writing in the Calculated Risk blog and using data developed by Trulia chief economist Jeff Kolko, estimated household formation soared to about 1 million in 2011 as, accord- ing to Kolko's analysis of postal service data, "the number of occu- pied housing units—that is, those receiving mail—rose by 970,000 in the last year, from mid-July 2011 to mid-July 2012." "The housing market is indeed moving in the right direction," add- ed Zugheri. "I don't think we can say we're out of recovery, which by definition means we are returning to a normal state of being. If we consider the 2000s housing market 32 | THE M REPORT the notion of moving up. People see new homes coming up, they want to get rid of their old home, and so that creates activity. " Back to Reality T it's more than just perception. "It sure feels like the housing recovery is real," Whitehead said. o Brett Whitehead, presi- dent of Brandywine Homes, "I believe there were a lot of buyers sitting on the fence waiting for the bottom, and now we are at the bot- tom with historically low interest rates. It is one of the greatest times faster, spending fewer days on the market. Additionally, builders are noticing an increase in demand as starter homeowners take advantage of the good conditions and upgrade with custom-built homes. added, is a direct result of record lows in both home sale prices and interest rates. "Despite continued economic The increase in purchasing, he " said, "is regional, not national. In our regional environment, unemployment rates are some of the lowest in the nation. Northern Virginia's unemployment in June was only 4.1 percent, for example, and [the region] has added 28,000 new jobs in the last 12 months. Our region's economy weathered the recession better than most of the country, due in large part to the federal government. Because of this, our housing market (over- all) was not hit as hard and also began rebounding earlier than most. This is why we're seeing signs of a strong housing market in many jurisdictions despite the lackluster national jobs/employ- ment picture." Mark Brawley, a residential broker in Houston, agreed. "The housing market looks good depending on where you look," struggles, consumers who have been on the sidelines for a few years are recognizing a buying opportunity with current price points, available inventory, and his- torically low interest rates, MacLean cited a recent Forbes " he said. he said. "In Houston, for example, our market has bounced back in a big way. This is due to our local economy and job market, which is outperforming the majority of the country. People know Houston for oil and gas, but we also have the largest medical center in the world,