Miserable Housing Data, Again

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The August Credit Suisse First Boston Survey of Real Estate was released today. The results of the comprehensive (fifty major residential markets), boots on the ground, reliable yardstick for residential home predictive behavior paints another gloomy picture for the housing market despite record low mortgage rates.

Home prices are declining across the country at a faster rate and are now at early 2009 levels, which correlates to the depths of the (first) recession plunge. Key factors are depressed buyer traffic which has forced sellers to become more realistic about their bottom line selling price,rising inventory, a sense amongst many buyers that prices will continue to slide, additional foreclosures and, anecdotal fears about government policies that may impact taxes and job prospects.

The lowest major market traffic readings were in Minneapolis, Chicago, Phoenix, Denver and Charlotte and in foreclosure-heavy markets such as the New York metro area and Ft. Meyers. Investors, data indicates, are not buying as they were previously.

CSFB expects further home price weakness in the coming months based upon the trends outlined in their survey. With 3.98 million existing homes for sale nationwide and more foreclosures to come, I suspect that stocks of companies in the home building (new construction) sector should be in no hurry to be bought for inclusion within your portfolio.

The CSFB Survey did not recommend a time frame for buying into the residential home market as a customer or investor. I view this as a significant and persuasive omission.