Is the Tide Starting to Turn?

Sales activity has clearly picked up in the Manhattan real estate market in recent weeks. Prices have declined by more than 25% over the past year, and potential homebuyers are hungrily eyeing attractively priced properties. The stock market has also enjoyed a nice little surge over the past month, boosting confidence that the worst of the recession may be behind us.

Nationally, the real estate market appears to be improving as well. The number of Americans signing contracts to buy previously owned homes climbed 6.7 percent in April, more than forecast and the fourth increase in five months, as lower prices attracted buyers.

The gain in the index of signed purchase agreements, or pending home resales, was the biggest in more than seven years and followed a 3.2 percent increase in March. The April reading was up 3.2 percent from the same month a year earlier.

Foreclosure-driven declines in values and tax incentives may put more homes within reach of first-time buyers, helping to stabilize the market and stemming the biggest drag on economic growth.