Friday, May 23, 2008

Will the Housing Bottom Analysts Please Stand Up?

Will the Housing Bottom Analysts Please Stand Up?

Sales of existing US homes fell 1% in April, slightly better than expected, but inventories of unsold homes surged 10.5%, according to the National Association of Realtors.

You have to love the MSM and the analysts. Just make everything "Better Than Expected" and make it look like everything is fine. Remember from May 15 - Freddie had a loss

"smaller than expected" so the markets are up. There are so many examples over the last month, it would take few blogs to just list them all.

You can't put a lipstick on this pig. Remember this is the spring selling season. This means the spring selling season is a bust. Inventories are suppossed to be moving down. But they keep moving up!

For single family homes, at the current sales pace there were 10.7 months' worth, the biggest supply since June 1985 when it stood at 11.4 months.

We are talking record inventories! We are closing in on 1 year inventory mark.

"My projection is that the second half will be notably better in terms of home sales,'' said NAR chief economist Lawrence Yun, commenting that inventories are ``uncomfortably high.''

It's so bad, that even the morons at NAR can't put a lipstick on it (that doesn't mean they won't try). And you know it's pretty bad when NAR says inventories are ``uncomfortably high.''

There have been analysts calling for a housing bottom since last year. Will they please stand up and tell us whether they think this is the bottom?

We've have said in the past on this blog there are still more risks to housing. With more layoffs, the job market is getting worse. And with inflation rising, the interest rates might start going up. I don't even want to think what would happen if the interest rates started going up.

So this is where the fed rate cuts, who in the last rate cut said the 8-2 vote for rate cut was a "Close Call", has left us. The rate cuts have not helped housing, and they have hurt the consumer with rising inflation.

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