Where’s that bottom everyone is talking about?

Buyers seem not only to be looking again, but they are starting to make offers.  And the offers are less likely to be insulting than they were just a couple of months ago.  Much of the activity appears to be centered on properties listed below $1 million, though buyers at higher levels clearly are less gun-shy than they were in the recent past.

If you doubt the foregoing information, have a look at Sunday’s New York Times, which leads the Real Estate section with a long piece that has the following headline:

Bidding Wars Resume

Regular readers of this blog and my e-newsletter won’t be surprised by the news: I have been warning that such wars would reappear once there occurred a perception that the bottom was here or approaching.  (However, my timing was a bit off; I didn’t expect that change until sometime next year. In any case, I doubt the trend is widespread yet.)

Ask buyers about their renewed interest, and the answers are almost the same:

Five reasons to be cautiously optimistic

1. New jobless claims filed last week fell to their lowest number since January in data released yesterday, though 512,000 individuals were newly out of work.  Yet the number is down from the 700,000 and 800,000 weekly numbers during the depths of this recession.  Of course, it is not irrelevant that the unemployment rate is topping 10%.

2. U.S. business productivity grew at its fastest clip in six years in the third quarter.  The Labor Department said on Thursday that productivity surged at a 9.5 percent annual rate, the quickest pace since the third quarter of 2003.

3. The Dow increased 203.82 points, or 2.1 percent, to 10,005.96 at 4:01 p.m. in New York for the biggest advance since July 23. The Standard & Poor’s 500 Index rose for a fourth day, adding 20.13 points, or 1.9 percent, to 1,066.63.  And more than nine stocks gained for each that fell on the New York Stock Exchange.

4. Expansion and extension of the home buyers tax credit.  (See previous post.)

5. Finally, envious though we may be, top producers on Wall Street are looking forward to blowout paydays once again, somewhat diminishing the prospect of a wan real estate market in Manhattan next year.