When we meet with clients, almost every conversation has a common question: "When is the market going to turn back around?"  People far smarter than us have been trying to figure that out for quite some time. The last Pending Home Sales Index from the National Association of Realtors (NAR) showed a substantial 10.4% month-over-month increase. The index measures housing contract activity based on closed transactions for single-family homes, condos and co-ops.

 So what exactly does this mean for the future of real estate? It shows us that the demand for housing has begun to increase (think tortoise, not hare).

Both NAR and Fannie Mae expect an increase in sales over the upcoming five quarters. Here are their projections: 

So What's the Bottom Line?

Based on these projections, sales will increase over the next several quarters which will initiate a housing recovery. But don't expect it to happen overnight.  Price increases will not take place until current inventory levels diminish. That could easily take 12-18 months.

*Kudos and thanks to KCM for this great research and analysis.