We had an abundance of housing reports released this past week that were all positive. From my vantage point the improving market is steady but slow, however you could be mistaken if only reading the headlines from the liberal press.
Pending home sales hit nearly three year high. New Home sales rise almost 16%. Home prices rise 6.8%. Existing home sales edge higher, inventory at 13 year low. All headlines from the press the preceding week.
Yes pending home sales reached a level not seen since the tax credits from the Stimulus were about to expire in April of 2010. Do you remember what followed? Just like cash for clunkers home sales collapsed.
Pending sales are just that, pending. It is one thing to have homes go under contract but another getting the sale closed with the labyrinth of new regulations from Dodd Frank. Nearly 20% of the pending sales in 2012 didn’t close.
New home sales did rise but once again on a seasonally adjusted basis. In other words this is a number subject to manipulation. Non adjusted numbers are usually lower. The only evidence necessary that these adjusted numbers are inflated is this; if things are so good why would Builder Confidence decline?
Home prices rise from the ashes but remain at about 2000 levels. This too is a manipulated number because the inventory being reported at a 13 year low is also manipulated. There are millions of foreclosed homes being withheld from the market to force up prices. Simultaneously Bernanke continues his pact with the devil extending his zero interest rate and quantitative easing policies.
Why would Bernanke extend these programs? Because the economy is not as good as being reported? If these programs were halted would the markets crash? Take your pick.
Existing home sales edge higher. Yes they did by 0.4%. Lawrence Yun, chief economist for the National Association of Realtors adjusted his forecast for existing home sales in 2013 from 5.1 million to 5 million.
Translation; existing home sales continue to run at 80% of healthy, and 65% of the peak. New home sales at a seasonally adjusted 437,000, remain at 62% of healthy and at only 40% of the peak.
As this slow recovery continues there are severe headwinds building that could stop it in its tracks.
Although Consumer Confidence climbed back to 69 it is still a failing grade. What impact might President Obama’s manufactured ‘Mayan Calendar’ Sequestration fear monger campaign have on confidence? Rudy Gulianni has called it a fraud to tell the American people that a 2% cut in the rate of increase in spending would result in the Obama predictions.
Writing this column on the day before the end of the world on March 1, my guess is the sun rising in the east in spite of the first attempt in two decades to reign in spending. A baby step certainly, but each journey begins with that first step.
Continuing to balloon the debt, or raising taxes again by 1,200 billion dollars which is Obama’s goal, would cause significantly greater job loss and prevention than the sequestration.
Think of such a gigantic tax increase at a time America just learned that Obamacare isn’t cost neutral after all. The GAO reported this week Obamacare will add 6.2 trillion dollars to the costs. This mother of all headwinds will prevent or kill how many jobs?
If Obama gets his tax increase, how long before Lawrence Yun would be revising home sales down again? But at least Dr. Yun isn’t Bob Woodward who became the first mainstream media journalist to report the truth about Obama’s actions.
Obama’s tactics look all too familiar to this Illinois resident. Obama does in fact have the ability to cause the harm he predicts, because under law the president has sole authority where to make the sequestration cuts regardless the flawed law he signed.
Perhaps you remember the rich history of Chicago? Obama reminds me of a fellow named Capone who sent out his version of Holder, Napolitano, Panetta, and LaHood to tell people; say nice business you got here, be a shame anything happens to it.
Is Obama saying to congress, you don’t wanna raise the taxes? I can cause an accident and make it look just like you did it.
Don’t believe me? Ask Bob Woodward who just received an email from a very senior White House staffer who said, “you gonna regret what you did”.
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.