Is it finally here? The light at the end of the you know what?
(tunnel, for those who are bad at guessing)
The government (yes, OUR government) is reporting that sales of new, single-family homes went up some 11 percent in June from the previous month while, at the same time, the actual number of new homes still on the market was at the lowest number since the winter of 1998!
One expert (and we all know how accurate experts have been of late!) is even quoted by Reuters as saying that the figures support the thinking that the “housing market has bottomed and that the economy has stabilized and will grow in the third quarter.”
Really?
Well, let’s look at some other “data” and see if all this survives the sniff test.
Foreclosures are still very much on the rise…so is the national unemployment rate (some states, like California, have unemployment rates that make the federal number look positively spectacular).
And, while these numbers continue to go up, the medan sale price for a new homes continues to go down—in fact, a full 12 percent lower than one year ago.
But what about those people buying up the new houses? Isn’t that proof that all is once again right with the world?
Not really. Again, keep in mind that there are a lot of bargains out there now in real estate…provided that you have enough money and credit to take advantage of the situation.
The people buying homes now, for the most part, are still exceptions rather than the rule.
Sooner or later, of course, this mega-recession will end; maybe we are, in fact, seeing the beginnings of this healing process. But don’t get lulled into a sense of false security by data from a relatively small period of time.
There is an old axiom in science that extraordinary claims require extraordinary proof.
In light of the extraordinary recession we have found ourselves in, we need extraordinary proof that it is about to end. We’re not there as yet!
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Article Author:
Charles FeldmanCharles has written 149 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog.
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{ 3 comments… read them below or add one }
Recent data suggests the worst could be over with better than expected retail sales and slight growth in house prices. I hope this transends to travel where we are having a tough time
David from Gatwick parking http://www.flypark.co.uk/gatwick.html
I think the worst of the recession is over and if you are thinking of property as a long term investment now is the time to buy. I have always been a fan of property investment and will be using this positive news to invest and see returns.
Property is still a good investment right now if you have the money. However, I don’t think we’re out of the hot water yet.. plenty more people are cutting jobs, and houses are going into foreclosure.
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