We’re off to the top of the world: Qaqortoq, Greenland.

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Imagine being raised on the world’s largest island, population steady at 56,000 brave souls,  80% covered in Ice, where the temperature in summer rarely achieves 50 degrees F, and the only colors you’re likely to see are the blue of the surrounding ocean, the brown of the barren rock and the ever present white snow and ice! That must be why they paint their houses vivid colors. I’ve always had a fascination for quirky vacations so we’re off to Greenland and Iceland for a couple of weeks to see the lands of snow and ice with  what’s left of the midnight sun!

The stock market is nearing the top again turning 201K’s back into 401k’s and giving a boost of confidence to the new construction housing market. Though housing starts took a slight breather in July, new permits reached 812,000, the highest level of new permits since August of 2008. In the Metro area, housing permits were up 18.5% over last year with total permits from July 2011 to July 2012 at 2983, according a report by the Minneapolis Association of Realtors. Additionally, the price range with the strongest sales for the same 12 month period was the $350-500K range.   There were only 4.4 months of existing home inventory and 6.6 months of new construction home inventory on the market at the end of July. Both of these inventory levels are down significantly from last year; 41% for existing and 27% for new. The days of low balling an offer appear to be coming to a close as we head into a market where price ranges from $0-500K seem to have reached balance or even tipped in favor of sellers just a bit.

A must read: Harvard Publishes Annual Housing Study

“While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening, and a floor is beginning to form under home prices,” says Eric S. Belsky, managing director of the Joint Center for Housing Studies at Harvard. “With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single family home construction over the course of 2012.”

http://www.jchs.harvard.edu/research/publications/state-nation%E2%80%99s-housing-2012

The key to continued improvement in the housing market will come from new household formation.

The people underwater on their mortgage aren’t able, in many cases, to move. First time homebuyers have no such constraints. Tired of living out of boxes and ready for a place to call their own, the 20 somethings who are still living with their parents will move out as soon as it’s economically feasible.

In a ‘normal year’ in our country, 1.2 Million new households form but this past year there were less than 700,000. It keeps hitting the headlines of the presidential race that jobs growth is the key to getting our economy going. I got a call from a young woman a couple of weeks ago who was one month into her first job out of college. It took her 4 months to find it. Her first priority was to find her own place. She had checked into renting a townhouse within commuting distance of her job and the rents were nearly double what it would cost her to purchase a similar unit. She’s under contract to buy and can’t wait to paint and decorate it to her tastes.  Imagine what will happen to the housing market when an additional 500,000 households form each year in the years to come. Sharpen your first time buyer skills and figure out how to read a blueprint. It’s been a long time coming but I think those of us who stuck it out are about to be on top of the world again!     -Kate Wilson

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