Question:  Was the jump in existing home sales in September encouraging, misleading, or ho-hum?
The answer is yes. It is ho-hum because the pending sales index predicted the jump. So there is nothing new happening in the housing market. It was encouraging because it was more good news about a housing market that is in real recovery. The coming months will display a consistent positive movement in real estate. It was misleading because the additional sales were “borrowed” from 2010 because of the expiration deadline of the first time buyer tax credit. We will …

I’ve been thinking about this for a long time. At the outset, let me say that I support an extension of the first time buyer tax credit. But I worry–or at least my inner economist worries–that at this point it’s bad policy. Not for the usual reasons. I’m not worried about the additional public cost of the program: in a world of trillion dollar deficits, $15-20 billion is chump change. I worry a little that it costs so much: in the first round, we’ll spend about $20 billion to pursuade about …

I think that by now it’s clear to just about everyone that the recession has ended. But the real question is whether the recovery has yet begun. Signs of hope abound in real estate as sales, pending sales and starts are all up. The market at lower prices ranges is booming and gradually that activity will creep up the price scale, even though the number of foreclosed properties for sale increases. This is the way it has always been in real estate cycles and this one is no different. It …

Well, you didn’t think it was going to be easy, did you? The August existing home sales numbers are down, after six up months. This is not a troubling sign, but rather one that is to be expected as this economy and this housing market groan and claw and scratch their way out of the slough of despond that was the market over the past three years. We need to have some perspective here. Housing cycles (measured by sales not prices) last on average five years. So, if the turnaround is …

Consumers are smart, and they are adaptable. Several years ago, retailers decided to stimulate holiday sales (and combat the encroachment of Internet sales) by discounting thier products. It worked–for a while. Then consumers adapted and waited until later in the season to buy, reasoning that more discounts could be coming.
And retailers gave it to them, again and again. Finally, sales could be bumped only by sacrificing margin, in both good economies and bad. Now we have August retail sales numbers up more strongly than any in over a year. That’s great …

The incoming statistics are getting less bad. I can’t say good yet, but less bad ain’t bad. Factory orders and consumer confidence are both improved and the job loss numbers are less troubling. In August, job losses were milder than expert predictions for the fourth out of the last five months, coming in at 216,000. To me, this is the most important number for both the economy and for real estate. We cannot grow unless we are creating jobs and both residential and commercial real estate are tied closely to people working. All …

USA Today reports tha 57 percent of Americans don’t see the stimulus working. If I were polled, I would have answered (presuming such a choice existed) “Yes, but”. The stimulus has not yet done very much to boost the economy (although the bottom has indeed been reached) because of two factors, one intended and one unexpected. When the stimulus plan was presented and was being discussed, it was reviewed by Congessional Budget Office analysts. They concluded that only ten percent of the effect of the stimulus would be felt in 2009, …