And the good news keeps on rolling in!

Hot off the National Association of Realtors website today

"Existing-home sales rose again in November and remain above a year ago, according to the National Association of Realtors®. Also released today were periodic benchmark revisions with downward adjustments to sales and inventory data since 2007, led by a decline in for-sale-by-owners."

" The latest monthly data shows total existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010."

" NAR chief economist, said more people are taking advantage of the buyer’s market. “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans."

" NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said housing affordability conditions have set a new record high. “With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” he said."

" Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7.0-month supply⁴ at the current sales pace, down from a 7.7-month supply in October. “Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels,” Yun said."

So to wrap up, what we have is a market that is definitely stabilizing, sales are increasing, and have increased November over October as well as year over year, which is very important. More homes are being sold by real estate companies then owners, another important fact and another reason sales have increased in volume and price. On a national level housing is more affordable now then it has been in many years, between depressed home prices and super low mortgage interest rates, you have the perfect scenario for buyers to benefit. Housing inventory has been steadily on the decline and is almost at parity now and what that means is we are close to stabilizing. Once this happens we will see home prices start to rise on a more even basis rather then only in specific markets as it already has.

This is definitely good news which just adds more credence to my belief that we are closer to the bottom of the housing market then not, in fact what we may find in retrospect is the bottom in housing was yesterdays news.

Some more good housing news

We've been getting news almost daily that conflicts with other seemlingly good news, but recently each successive weeks news seems better then the last and recent news seems to confirm this positive trend.

For instance yesterday it was reported by Reuters "  U.S. housing starts surged to a 1-1/2 year high in November and permits for future construction were the highest since March 2010 as demand for rental apartments rose, offering hope for the weak housing market."

As a result of this good news the stock market had reason to go higher which was helped by more good news that Germany business confidence levels rose and the auction of Spanish debt went well causing rates to drop. Most of which this good news was noise, meaning only temporary because confidence can change at any moment based on, you guessed it  "more news" and debt auctions move with sentiment and confidence but still its was a nice change from what we have come to expect which is "not so good news"

The only real substantial news out of it all was that our housing permits rose, that is real, hard to dispute, it requires somebody somewhere to have confidence enough to put up real hard cash and to commit to even more debt obligations, so it would seem these housing rumblings are for real.

Anyway back to the housing stats.

From Reuters"The Commerce Department said on Tuesday housing starts jumped 9.3 percent to a seasonally adjusted annual rate of 685,000 units, the highest since April last year."

" Economists polled by Reuters had forecast housing starts rising to a 635,000-unit rate. Compared to November last year, residential construction was up 24.3 percent."

A good gauge to better see into the future is tracking building permits which rose 5.7%, this was due to an increase in permits to build apartments/multi family housing. It seems that the the fallout from the severe decline in home prices coupled with the difficulty in securing home mortgages as well as owners who have lost there homes has pushed more people into renting instead of buying or buying a smaller multi family type home.

No matter, any increase in housing construction is a very good thing for the economy because each home built creates an estimated three additional (3) jobs and better yet results in about 90,000 in additional taxes generated. We still have a long way to go but it looks like we are finally on our way.

Housing is starting to gain some credible traction, builders confidence is at the highest its been in almost 2 years, we have two quarters of positive housing growth, so it appears that housing is becoming less of a drag on the economy and if this is to be taken as an indication of the future, maybe we have really started to turn the corner in our housing markets.

All in all the news was very positive, a few more months are needed to confirm this trend is real and then watch things start to take off. Keep your fingers crossed that this positive housing trend is for real, because rebuilding the housing market is whats needed to rebuild our economy, its a major contributor to our GDP.

Mixed Messages

We've been getting economic news that at times conflicts, just last week the news came in that initial jobless claims declined by 15,000 to 366,000 which is the lowest its been in almost four years, though at face value the news is good we must take into account the seasonality affect. During the holiday season its not unusual to see more hiring only to see more firings after, lets hope most of these jobs stick once the holidays pass.

Other factors that would help us to believe things are getting better is that with jobless claims falling you would like to see both homes sales rising and mortgage applications as confirmation that workers are feeling more confident. But what we have is mortgages applications decreasing by about 8% last week which wiped out the gains of the prior week, so in the past few weeks there was no gains in mortgage applications. What we would like to see is the trend growing not stalling out so we need to see what happens over the next few weeks. Year over year according to the mortgage bankers association we are just about where we 1.5 yrs ago with mortgage applications. Like I said, we need to see steady growth every month, as it stands right now its just not happening.

Though mortgage applications appeared to have stalled, housing seems to be doing some what better. According to Housing Tracker, the median asking price for homes in 54 metropolitan areas was positive three weeks in a row, growing on average 1.1% year over year. With almost half of these areas now posting positive gains in housing prices, that is very encouraging news. These stats confirm my previous posts the homes prices are bottoming and in some cases even rising.

That was the good news, now here is some of the bad news. When you look at the number of sales that the market used to handle in any given year we are still down about 50% from the peak years running from 2000 through 2006. So while we are making headway we still have a long way to go to the good old days of homes sales. In 2000 existing home sales were about 4.5 million and reached a peak of 6.34 million the end of 2005, existing home sales now are about 4.4 million, which is close to the average of the prior two years. So its does appear that both housing sales and prices have found a bottom.

If housing is to turn around the economy needs to not only grow but grow enough so that employers will feel comfortable enough to hire again. Before consumers will venture out and back into the housing market they need to feel confident with their jobs, the economy and the future, unfortunately right now thats not how most feel.

So while certain segments of the real estate market (distress sales, retirement, second home, luxury) have and will continue to show improvement the vast majority of the market will just thread water until the unemployment level starts to drop in earnest and consistently every month.