Seems the most maddening thing about the housing market for most of my clients is the fact that each day both good and bad news cross the wire and it’s unclear which information should be most comforting or most concerning.  In my last post I wrote about home starts increasing (good news for home-builders), the median home price increasing (good news for home-sellers with high cost homes) and affordability levels improving (good news for home-buyers currently shopping).   However, I also noted that foreclosures are increasing (bad news for banks and upside down home sellers) and that unemployment is still staggeringly high (bad news for everyone).

Keeping with this theme, today I bring you equally conflicting news about existing home sales.  The National Association of Realtors released stats on existing home sales in May boasting the first back-to-back monthly gain since September 2005.  Further analyzing the stats, the Wachovia Economics Group reports that sales of existing homes rose to 4.77 million units at an annual rate in May, as the portion of distressed sales retreated.  Distressed or foreclosure-related sales accounted for “just” 33 percent of activity on the month, a notable decrease from recent months when it reached nearly half of all sales.  Still the housing market remains under pressure (mixed news for everyone).  Also to note for us out here in the West, existing home sales actually decreased ever so slightly -.9 percent compared to April when the statistics were seasonally adjusted.

On the new home sales front we also have a “mixed bag of news.”  Again our friends at Wachovia Economics Group report that sales of new homes slid to 342,000 units at an annual pace in May, off of a downwardly revised level of 344,000 in April.  Over the last three months the net revision was a loss of 32,000 units.  While the market was looking for a slight gain, this report reinforces the picture of a market moving sideways for some time.  They note that although sales have dropped they are doing better than January 2009 and both median and average prices have moved higher for the second month in a row.  This news coupled with increased housing starts reaffirms a flat market for home-builders for a while longer.

What DOES seem to be clear is that the world is not falling apart (aside from some conflicting messages from Iran and Korea), the banking system is not collapsing, and homes values are no longer in a free fall.  That’s the good news.  What also seems to be clear is that the good old days of the early 2000’s aren’t returning any time soon.  What is required in the housing market going forward is an eye to the past so we can best avoid our previous transgressions, firm footing in the now to address the flaws and imbalances causing impeding recovery, and a positive watch on the future to insure we continue on the right path back to prosperity.  We’ve been here many times before…

Keep your head up!