The recent activity of home sales in markets which are affordable to first-time buyers, are being driven mainly by foreclosures and short sales. Subsequently, the typical or average homes for sale are not moving yet.
Then there are the too few sales in expensive cities and towns thanks in part to a lack of financing creating the impression that these overly priced homes are significantly decreasing in price. Which they are not.
Overall, sales continue to be negative to flat with foreclosures still rolling along and gaining speed. Absorbtion/inventory is just about at 10 months, which is much too high- about 4 months over normal levels.
On the labor front, it’s also more bad news. The current administration is now in damage control mode- gushing about how sorry they are for stating that the job market and economy is much worse than they predicted.
Retail sales for June are expected to be down- yet again, somewhere between -5% and -6%. Bankruptcies and closings for major retailers continue to loom as well.
The jobless rate will keep climbing and consequently so will loan defaults, which will only add fuel to foreclosure fire. Delinquencies on credit card debt and home equity loans soared to an all-time high in the first quarter of 2009.
Meanwhile…inventories will keep increasing as a result- and the housing market recovery won’t even get a city block out of the gate.
