Pasadena home sales for the month of July are still about 3-4 weeks away from being released on a national level. Expect a reversal in the continuing bad news that has plagued the housing market for the last year. Why the change? Is it from the expected passage of the 
Housing Bill making its way through Congress? Have the number of foreclosed homes finally reached their peak and now are beginning to level off? Have home buyer’s come to recognize that the bottom is soon approaching and pent up demand will drive the market higher? Or have consumers just been inundated to death by articles and advertising campaigns stating that “now is a great time to buy a house” and it is finally beginning to pay off?
The answer is ….probably not
It would be great news and also provide a much needed boost to the housing sector if we could pinpoint the expected July turnaround to the proactive position taken by consumers and to a lesser extent, government intervention. But the underlying reason of the better news can only be attributed to one thing, and that is…. time.
It was July 2007, when we noticed a substantial drop in home sales activity. Although projected home sales for the month of July 2008 will be predictably in line with what we have seen so far this year, when compared against last year it will appear that the housing market has began to steady itself and that the worst news is now behind us. The outlook for the remainder of 2008 also appears to be favorable based upon the recorded home sales in the back half of ’07. While the next few months may begin to appear more positive, its not much to get excited about. But then again it will be portrayed as a sign that the market is on track and that in itself will allay consumer skepticism. The perception will be perceived as a return to normalcy and as we all know, perception is reality, when in fact you know it as a false positive.
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Good insight. I’ve been reading about the auspicious year-over-year July sale data, and the tone is much like you say. “Things might be looking up.” Your point is well taken that year-over-year data isn’t just influenced by changes in this year, but changes in last year too. The line graph makes it crystal clear. Thanks.
Sam, thanks for your comments. Hopefully the gap does narrow and the media reports it as a positive sign, which is what the housing market needs.