May 12, 2009 -- There is a growing belief among financial experts that the recession is over.
Barry Knapp, a strategist at Barclays Capital, wrote recently that the economy appears "to be in the sweet spot of a recovery" and that the recession may have ended last month, according to Bloomberg News.
Liz Ann Sonders, chief investment strategist at Charles Schwab, said on "Good Morning America" today that she agrees with that conclusion.
"It isn't any brilliant prescience on mine or anybody else's part," Sonders said. "There's certain indicators we can look at to set the turn, and I think we have seen that turn."
Sonders warned that unemployment is a lagging indicator and, historically, employment figures don't begin to recover until six months after the end of a recession. That means that this time around, unemployment likely won't peak until the end of this year.
But, she added, there are already positive signs on the employment front. Layoffs are slowing, and unemployment claims are starting to edge lower.
Meanwhile, there is also good news in housing: At least one real estate insider is actually using the words like "normalizing" and "housing market" in the same sentence.
"We're hitting some trends that show that we may be approaching a bottom, or we may be at a bottom right now," said Pat Lashinksy, the CEO of online broker ZipRealty.
A leading indicator of how the housing market is faring is inventory, the number of homes on the market. When the number of homes for sale goes down, prices rise and the market improves.
Lashinksy said that that's what's happening now. New data from ZipRealty shows that buyers are moving into the housing market at levels not seen in two years.
"Inventory levels are actually declining, and median home prices of homes available for sale have actually gone up," Lashinksy said.
Enthusiastic Buyers Pump Up Housing Market
ZipReality said that as of right now, it would take 8½ months to sell all the homes currently on the market, up from a high of 11 months in October 2007. Most economists say that six months is normal.
In cities like Tampa, Fla., Houston, Phoenix and Los Angeles, housing inventories have dropped dramatically.
"The fact that inventory is declining is suggesting that soon we may see home prices begin to stabilize. In some markets, it may begin to turn upward. But the downturn in the housing that we've had for the last three years may be coming to an end," said Lawrence Yun, the chief economist for the National Association of Realtors.
"Buyers are a lot more engaged," Yun said. "There's an excitement and a passion that hasn't been seen in the last 18 months right now."
What's motivating buyers is low interest rates on mortgages, lower home prices and a new $8,000 tax credit for first-time buyers.
Asked to compare the length of the housing crisis to a baseball game, Lashinsky said that the country is now in the seventh or eighth inning.
"We've been through all the excitement of the upfront and we're starting to come up to the big finish," he said. "And hopefully, we get through the finish and we don't go into extra innings."