Real Estate Outlook: Numbers Best in Months
Every week, it seems, there's a battle of conflicting numbers when it comes to housing. The latest existing home sales survey from the National Association of Realtors is a perfect example. You may have seen the news reports about another bad month for resales -- down for the sixth straight month, according to the Associated Press, to the "lowest level" in almost a decade. But take a closer look: Yes, resales were lower by four tenths of one percent in January, but they were down from an upwardly-revised total for December. Drill down just a little deeper and you find that resales of single family detached houses were actually up in the latest month -- up by one-half of one percent. Condominium and cooperative sales, on the other hand, took a sharper drop -- falling by 6.5 percent, and that dragged down the national sales total overall. So the real news was mixed: Sales of detached single family units ROSE in January while condos and cooperatives were down. Either way you present it, though, total resales were essentially flat from month to month, hardly as dramatically negative as the scare headlines had it. Maybe we're at bottom, maybe not, but the fact is: Sales are not falling off the charts. Also last week, there were some other mildly positive economic signs: Construction starts of new houses rose by eight tenths of a percent, and home builder confidence -- as measured by the Wells Fargo/National Association of Home Builders poll -- rose slightly as builders reported seeing stronger flows of shopper traffic through their model homes. Again, there's nothing dramatically positive here, but the numbers are better than they've been in months. They simply got drowned out by all the gloom-mongering. Even the Conference Board, a research group that represents a broad spectrum of U.S. industries far beyond real estate, said things are beginning to look up for housing. Chief economist Gail Fosler said in a report last week that "the housing market correction is about over ... . Housing affordability is beginning to improve, and with the recent interest rate cuts and house price declines, it should improve further." January and February, said Fosler, "are not big months for housing, but rising affordability (plus favorable demographic trends) bode well" for the overall outlook. Fosler's economic report preceded last week's jumps in mortgage rates -- taking 30-year rates back over 6 percent -- but her forecast on where housing is headed is significant. Someone's got to call the turnaround. Fosler thinks it could start this Spring. We'll watch and see.
Written by Kenneth R. Harney
February 28, 2008
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