A phenomena not seen for some time is occurring once again in the Washington D.C. area, bidding wars over homes for sale.  For the cautious optimists these events along with other trends are seen as preliminary signs that the housing market is nearing its bottom.  Data from last month seems to support these claims.  Surprising gains were recorded in February for the three levels of home sales; new, existing, and pending.

While it is too early to say with certainty that the housing market has reached bottom, there is almost a perfect storm of positive factors to support the claim.  Mortgage rates have dropped to record lows while the affordability of homes has shot up.  Along with the recently approved $8,000 tax credit for first time home buyers and low median home prices, the components are in place for a turn around to actually occur.

In talking with CNBC chief economist for NAR, Lawrence Yun, agrees with this view of the market, “We are close to the bottom…Once home sales begin to rise that could boost home buying confidence and get others off the sidelines.”

Yet the more cautious point to different statistics to argue that real estate is not out of the woods.  The high number of foreclosures have hurt overall home prices.  At the same time the continued increase in unemployment figures is shrinking the pool of potential buyers.

Even though there is disagreement on when the market will bottom, all agree that the goal is to push past the downturn and bring the real estate market back to it prior peak levels.  David Resler, Chief Economist at Nomura Securities echoes this sediment, “Hitting a bottom is not the sane to getting back to a healthy housing market and we’re a long way from that.”