The media is enjoying the latest weak housing data, this from cnbc.com:
Several other analysts started to question the strength of the recovery as well, with some just hoping that perhaps a warm winter had pulled some demand forward from spring. Despite a miss on existing home sales in February, the headline pointed to, again, big gains from a year ago.
Yes, we are ahead of where we were, but as we’ve noted so many times here on this page, rising foreclosures will put added pressure on this market, and we may not be out of the woods yet.
“Despite an extraordinarily mild winter, home sales just plod along at a pace last seen during the mid-1990s,” notes Mark Zandi in his monthly report from Moody’s Analytics. “Thus, the underlying pace of home sales may not yet be strong enough to support a long-lasting upturn by home prices.”
Tomorrow we get the monthly reading on the S&P/Case-Shiller home price index. This index hasn’t been improving nearly as much as home sales, but the ever-hopeful housing lobby keeps blaming that on the fact that prices always lag sales, which is historically true, but what in today’s market has followed history?
Home prices are still falling not because of some lag, but because this housing market is running on sales of distressed properties at the very low end. The rest of the market is still stalled.
They don’t think about any other possibility, they just make up the hot soundbites and push hysteria.
There is another explanation – sellers have gone crazy with their list prices, and buyers – loaded with ample market data – aren’t going for it. As a result, sales will suffer.
Here a examples of the seller exuberance, and how buyers are reacting:
There would be a surge of sales if list prices were more reasonable – and about 10% less would probably be enough. But the media won’t look deep enough – just a casual look, and off to the usual panic phrases.
Look how steady the SOLD $/sf trends are in every market – the buyers aren’t biting, rates are going up, and it’s almost April. If you are trying to sell, and your list price hasn’t worked by now, it’s probably time to beat your neighbor to a “price adjustment”.