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Is U.S. real estate ready to rocket? Be careful. Be very, very careful.

Jon Spinogatti
Realtor-actor Jon Spinogatti attends an auction on foreclosed homes in Las Vegas, Nevada  in 2012. BILL SCHILLER/TORONTO STAR

For all the feverish headlines Tuesday, you’d have thought the U.S. real estate market was re-born, ready to shoot off into the stratosphere again.

“Home prices keep soaring,” crowed CNN. “U.S. home prices rise 12.2 per cent – best in 6 years,” shouted the Arizona Republic. “Homes prices up sharply,” chimed the L.A. Times.

The stories were data-solid, based on the S&P/Case-Shiller May index of 20 key cities across America. All made gains year over year.

The survey is closely watched in the U.S. where housing is an obvious bellwether for the broader economy.

But something rang hollow to me.

We spent time examining the U.S.home market last year, attending auctions on foreclosed homes in a parking lot in Las Vegas, a Shark-like pool of gamblers betting on a comeback.

Every day, 300 homes were put on the block.

So I wondered: had the U.S. housing market finally hit bottom? Was it now pulling out of the ditch?

I called my friend Jon Spinogatti, a successful Vegas realtor and actor who recently finished shooting a big-screen film with director Martin Scorsese, aptly called “The Wolf of Wall Street.”

Jon was skeptical. He didn’t doubt the data, but he doubted the emergence of a sustained turnaround.

“That would be just plain faulty thinking,” he said. The component parts for a comeback just aren’t there yet. “I still don’t think we’ve hit bottom.”

The Vegas market, for example, needs about 12,000 to 13,000 homes in its inventory to run a healthy market where house prices can rise to their proper value. But Vegas has just 5,000.

Plus, the passage of Bill AB284 by the Nevada legislature put a halt on further foreclosure, artificially staunching the bleeding.

“The result is that you have some people living in homes today who have not made a mortgage payment in six years.”

Meanwhile unemployment across the country remains high, the middle class has lost ground and mortgages are nudging upwards.

The auctions in the Vegas parking lot continue at 930 S. Fourth St., though at less volume, he says.

Spinogatti isn’t pessimistic. He’s just realistic, given prevailing circumstances.

He can always fall back on his acting of course. But even that can be treacherous.

In Scorsese’s Wolf of Wall Street, set for a November release, Spinogatti plays the butler to Leonardo DiCaprio’s leading man. Caught with his hands in the proverbial cookie jar, Jon is hurled off a balcony.

Does he hit bottom?

Well, guess you’ll have to see the film.

Bill Schiller has held bureau postings for the Star in Johannesburg, Berlin, London and Beijing. He is a NNA and Amnesty International Award winner, and a Harvard Nieman Fellow from the class of '06. Follow him on Twitter @wschiller


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