The day after the market reports that housing starts are up, we see a slide in home sales. Nothing surprising since in my previous post I mentioned how the data is always a little behind the market, but who cares… What does this really mean? I don’t think anyone knows. Countless Grey haired professionals are being brought onto the news shows and questioned for their “experienced opinion”. Yet most of them seem to quote something like “follow the basics” or “fundamentals”, not really giving you a straight answer. How could they? No one has ever seen a market quite like this, and no one really knows what is going to happen. We have a credit problem which has never been this bad not to mention some of the most aloof consumers ever. Here is a great video from CNBC below.. or you can read the full story here.

The NAR talks..According to the latest home sales data from the Realtors association, median home prices fell 0.6 percent from a year ago to $228,900. Lawrence Yun (National Association of Realtors economist) stated, “In the aggregate, we don’t see the subprime market damaging the economy”. Yeah, I agree, it’s the credit crunch and tightening of lending guidelines, that’s what’s going to kill the market. Simple supply and demand…lot’s of homes for sale, very few people with good credit and 20% to put down. With the crazy loans that were in the market we made real estate a much more liquid asset than it really is, shifting back is going to be a little painful in my opinion. But remember, a lot of wealth can change hands when the market shifts, just make sure you don’t get shifted on.

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