A slew of reports from across the country suggest that, while housing construction itself hasn't revived, the economy at least is taking the needed preliminary steps in order for homebuilding to recover.

For instance, the Los Angeles Timesreports sales of existing homes are way up, particularly in communities with the highest foreclosure reports. "Sales in the last six months have gone up 89% compared with sales for the same period a year ago, according to the California Association of Realtors," the newspaper reports. "...There is strong evidence that basic economics is addressing the housing meltdown in a direct manner."

Resales are up sharply, while the number of months' worth of backlogged housing has shrunk substantially; in Stockton, Calif., for instance, there used to be a 40-months' supply of houses on the market and now there are about four, the Times said.

Meanwhile, in Florida, prices for condos in Miami have fallen so far that dealers are getting multiple offers. Mortgage applications have shot up. And the Census Bureau announced last week that new-home sales rose 4.7% in February from January.

Economists and housing experts have said often that in before home construction can resume, the credit market freeze has to thaw and the glut of recently built and foreclosed houses on the market has to shrink. That appears to be happening, but it doesn't always get noticed because the same numbers that portend good news also can be read as bad news.

The S&P/Case-Schiller Home Price Indices are a case in point. The latest report found that prices in the 20 markets studied are down roughly 30% since their peak in mid-2006. While this means many people have less money to tap in home equity lines and might even owe more on their mortgage than their house currently is worth, it also suggests that housing is getting more affordable.

Likewise, the National Association of Realtors (NAR) reported Monday that vacation-home sales dropped 30.8% last year to 512,000 units, while investment-home sales fell 17.2% to 1.12 million. Both drops exceeded the 13.2% decline in primary residence sales to 3.77 million.

On the other hand, this decline suggests a building up of demand. The NAR notes there is steady growth in people going through middle age--the prime years for buying a second home. It counts 39.2 million people in the United States aged 50 to 59, another 44.8 million people between 40 and 49, and 40.7 million between 30 to 39. "While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain," the NAR said. "Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade."

Earlier this month, Builder magazine reported, Real Estate Disposition Corp. conducted an auction at the Washington Convention Center in Washington, D.C., of 200 or so properties located in the District of Columbia, Maryland, and Virginia. More than 2,000 people attended the event, says Will Smith, publisher of UrbanTurf, a real estate Web site, who covered the event. And about 80% of those who bid on properties were first-time home buyers.

Window manufacturers also are finding reasons for optimism. According to a Web story by Remodeling, officials at Simonton Windows and Andersen Windows both are hiring back workers who had been laid off during the usual holiday slowdown a few months ago, and both companies are reporting interest from the field that has been spurred by the economic stimulus bill's tax credit for energy-efficient windows. Pella also intends to ramp up production later this month, the story said.