Wikinvest Wire

Hope for housing?

Thursday, April 23, 2009

This report by Ben Rooney at CNN/Money takes a few rather ambivalent comments by impartial analysts and combines them with more drivel from a National Association of Realtors shill, interpreting it all as a hopeful sign for the housing market.

Despite last month's decline, existing home sales appear to be stabilizing, according to Ian Shepherdson, economist at High Frequency Economics.

"Sales are volatile month-to-month, but the trend appears to be flattening off," Shepherdson said in a research note.
Yes, and they flattened out last year too before falling off a cliff (see chart from previous post), back when distressed sales accounted for a much smaller portion of overall sales.

By the way, what's with the characterization of distressed sales accounting for "just over half of all transactions in March" in the latest report? In the past, the NAR has cited percentages or a range of percentages, last month putting that figure at between 40 and 45 percent.

The phrase "just over half" could be anywhere between 51 and 60 percent, perhaps higher....

Here's the comment from the realtors' trade group:
First-time buyers made up 53% of existing home sales in March. Charles McMillan, NAR's president, said first-time buyers are "crucial" to a recovery in the overall housing market.

"The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down," McMillan said in a statement.
Between this sort of optimism and word of bidding wars on foreclosed properties (discussed here yesterday and reported again in the Wall Street Journal today), this is probably a very good indication that there is much more pain to come in the housing market.


GG said...

Couldn't agree more. When the bottom comes, it will be marked by apathy, not hope.

Anonymous said...

Another contrary indicator from moneymag: "Investors pulled their money out of the stock market in droves following last fall's credit market collapse. But they may be slowly putting cash back to work now that stocks are in the midst of an explosive rally."

Anonymous said...

Yeah well discount the "stabilizing".....

There was a moratorium on foreclosures at Freddy and Fanny for about 3 months. April 1st they could start filing paperwork again for those foreclosures. So, we have a magical 3 month backlog of foreclosures to "dump" back on the market ... like opening a dam.... why would that help????? And they are saying that today sales and "price discovery" are driven by the foreclosures.

Just wait a couple weeks for the fire to resume.

What Obama didn't consider is doing that moved these foreclosures from a higher employment period in an off season market to a lower employment on season... I guess he wanted to shock the market with a more brutal and floor drops out style "price discovery"

If you are selling now because you need to sell take whatever offer you get now before this hits... faster downturns usually have a much more severe overshoot!

Anonymous said...

Right, so if you are a buyer you probably want to hold off for a few more weeks for all this to take root.

Green shoots, right? :^)

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