Business Insider has an interesting graphic today:
This graph inspired the headline. I was immediately reminded of the store clerk who asks the shopper: "May I help you?"
The classic answer: "No Thanks. Just Looking."
Why is this happening?
One answer is that buyers are cautious after experiencing a housing bubble collapse. Another possibility is that a lot of home owners who would like to sell are trying to evaluate the market.
Anecdotally, two real estate agents I know personally tell me that almost all showings are for possible buyers who have a home to sell before they can buy - and many do not consider making contingent offers (contingent on sale of current residence). And only a small percentage of contingent offers go to closing, much below what transpired five and ten years ago.
Housing inventories are low which should be producing more interest in new homes. The modest increase indicates that the demand for new houses remains very low, within 100,000 +/- per year of the historic lows of early 2011 - and half a million below the pre-bubble sales of 1999.
Recent headlines show some promising data:
- CoreLogic: 1.4 million Homes Moved Into Positive Equity In 3Q's of 2012 In the story the data is revealed showing that 10.7 million home owners are still under water (negative equity).
- Top 10 Predictions for Housing in 2013: RE/MAX Co-Founder Sees 2013 as the Best in Years The best in years? This optimistic realtor predicts home prices will rise 3-4%, only about half of the 2012 number. And this is the most optimistic 2013 price prediction I have seen.
If we really have seen the bottom for this housing cycle it appears to me that the recovery will be a long slog.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.