Home Sale recovery??

"The latest encouraging data came May 4, when the National Assn. of Realtors said its index of pending home sales rose 3.2% from February to March.

First of all, remember what pending means. These are homes that have gone under contract -- but have not actually sold. The Realtors' association says that based on historical data, the pending sales numbers do closely track future sales. But the correlation is much stronger in the year-over-year data than it is in the month-over-month numbers. The increase over March 2008 was much more modest, just 1.1%."

This is not a recovery....

Cheaper Homes Selling Well

More than 40% of all sales nationally -- is being driven by banks unloading foreclosed homes at distressed prices. Higher-end homes are not selling anywhere near as well as cheaper homes. That's not an indicator of a truly healthy housing market.

At the Milken Institute's Global Conference last week in Los Angeles, leveraged-buyout king Thomas Lee pointed to a slide showing the large number of "Alt-a" adjustable-rate loans due to reset in coming months. These loans -- made to buyers with decent credit but who were required to show less documentation of their income -- could default in larger numbers, to the extent that they reset at higher rates.

Ok here comes the truth...

Another 10% to Go?

Donald Brownstein, chief investment officer for money manager Structured Portfolio Management, told Milken conference attendees that his internal calculations show home prices have to fall about 40% off their peak before hitting bottom. The latest Standard & Poors/Case-Shiller home price index numbers showed a 30% decline from the peak in the summer of 2006, meaning we still may have a ways to go.


This edit of an article posted on my website is the subject of my concerns...and like I said before...

the trump is right.