Yesterday the commerce department reported that new housing construction starts were up 17.2% over the same month last year. Many have speculated that this is a sign that the housing decline is over. Believe me, no one is happier to hear the positive speculation.

The “But”

However, the reality of the situation is that the vast majority of the new housing construction is in multi-family as opposed to single family. For sellers out there hoping that this means a rapid return to prices, be cautious. The competition from foreclosures and distressed sales in general is still at very high levels. Prices can expect to continue to decline. I would expect that we may level off for the summer and then see more price declines through winter before we reach the pricing bottom.

When prices do start to return, don’t expect the rapid increases in value that we saw between 2000 and 2006. Instead, expect a regular increase more in line with the historic value changes over the long term.

The good news

The good news is that we are seeing the beginning of the end of this decline. For those  that are considering buying, get in the market. Don’t wait until prices are headed up again. For those that are selling, do it now. Price the property appropriately and get it sold rather than paying the continued cost of maintaining the property. Go ahead and sell the property for today’s price and stop paying the costs associated with mortgage, insurance, maintenance, utilities, etc. In most cases, those expenses run approximately 1.5% of the value of the home each month.