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Many chief economists have been stating that the housing market probably bottomed out in February and is now slowly on the road to recovery.  An unexpected jump in new and existing home sales, a fairly sharp increase in mortgage applications, and a surprise increase in pending home sales are some of the reasons for such comments. 

Home prices, which had been falling like a rock, showed some signs of stabilizing during the month of February and are expected to come up slightly from the lows of the first quarter of this year.  Speculators also appear to be re-entering the market, picking up properties at exceptional bargain prices and in most cases paying cash, adding to negotiating power.

Home sales are still down substantially but pending sales were at such low levels, there was really nowhere to go but up.  Starts of single-family home sales, in particular, are already close to zero and cannot fall much further.  Overall starts are expected to decine again in the second quarter and then begin a gradual rebound in the second half of this year.

Short sales and foreclosures are still numerous, but are appearing less and less in many communities.  There is still a fabulous inventory of homes for sale at great bargain prices, without the hassle and stress of going through the bank owned procedures. 

The housing market is still a long way from healthy, but it is expected to swing from a "drag to a push" before the end of 2009, and be on a positive track for the first time in four years.  There is finally some light at the end of that long dark tunnel!