Who do you believe – U.S. Census who is telling you new home sales are down, or Econintersect who is telling you home sales are up? Or even a better question – is it significant enough to matter?
The “soft shadow” inventory in residential real estate is larger than the total of current inventory and the “hard” shadow. Resolution of the soft inventory is uncertain; it depends on how the economy goes in the coming years. If the recovery continues to bypass Main Street (read that as employment), a significant amount of soft shadow will enter the active inventory. In an improving economy a significant part of the soft shadow will simply fade away.
If one has low expectations, any data will seem better. May 2011 existing homes sales continues its mediocre start to the 2011 buying season. The reality is that home sales in May 2011 is not as bad as it appears, and beginning in July 2011 – will not be as good as it will comparatively appear.
Home prices are increasing, but all home price indices released through the end of May 2011 show this increase is coming from a lower level than a year ago. Case-Shiller home price index entered double dip territory with its March 2011 index surpassing the recession low point set in April 2009 , all other major home price indices are already in double dip territory.
Based on Econintersect’s analysis, Existing home sales in April 2011 should come in at 420,000 – an 20% decline over 2010. This crappy pending home sales data makes 2011 home sales future look bleak.