“We are seeing the resale sales volume in a lot of markets is rebounding. In California, some of the volume is coming back pretty strongly but most of that is attributable to distressed sales,” says Wayne Yamano Senior Manager at John Burns Real Estate Consulting.

The Los Angeles Times recently reported that some markets such as Phoenix have increased activity resulting in bidding wars over foreclosures and short sales. Some are even calling it a quasi-boom there. But is this a real sign of improvement? Is a national housing recovery going to look like what some say is happening in Phoenix? “There are a lot of things that we look at and we certainly wouldn’t call it a turn-around until we see some kind of stability in price and we’re not seeing that yet,” says Yamano.

Reports indicate that more homes are selling in Phoenix than at any time since 2006 and prices are appearing to be on the path to stabilizing. But the foreclosed and distressed properties are being sold at big discounts, which,, say agents, in that market is bringing out buyers.

But for much of the nation, home prices are still declining; however, it’s signs like these that breathe life and hope into the national real estate market.

“The silver lining is that the pace of decline in a lot the measures that we have been looking at like job growth, which has turned negative, and price declines… are not falling as quickly as they used to, so certainly that’s promising,” says Yamano.

The key factor these days is how affordable houses are becoming in many areas. “Affordability is the big story right now. And affordability all across the country is a lot better than it has been in any time in the last few years for sure. In markets like Phoenix, it’s the best time ever,” says Yamano.

“The way we’re looking at that is we compare housing costs to income. All across history, we’re finding that that ratio is the most favorable now. In markets like Phoenix, it actually is cheaper to buy a home (if you consider the tax benefits of buying a home) than it is to rent the median apartment out there,” he says.

It’s not exactly comparing apples to apples because you may not rent the same size home that you would buy but the point here is that the gap between buying a home and renting has significantly decreased. “During the boom when prices were high that gap was pretty large,” says Yamano. But now, says Yamano, “In a lot of markets, we’ve crossed that threshold, so it’s cheaper to own a home than to rent.” “Our sources at RealtyTrac tell us that 70 percent of REOs at the end of last year weren’t listed for sale, so that doesn’t show up in the supply numbers. So, that’s definitely going to put some downward pressure on price,” says Yamano.

Of course, this opportunity is even more intriguing because of the still-low interest rates for home loans. Yamano says timing the market is very difficult. “If you’re making a decision for your family, maybe you need a larger house because you have a baby on the way—you shouldn’t really try to time the market—you should buy a house for what it is—for shelter rather than an investment.” If you’re waiting for further decline you could find that house prices drop but interest rates rise. “The interest rates are at very historically low levels and we don’t think that they’ll stay there for very long. We actually even saw a pretty significant jump over the last couple of weeks. Maybe prices will come down a little bit, but if you see interest rates go up as well then it’s kind of wash—your home payment ends up being the same,” says Yamano.