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Home Prices Firmed in Second Quarter

|Includes: KBE, KRE, SPDR Homebuilders ETF (XHB)

The latest magic from the NAR (National Association of Realtors) is summarized by the following Realty Mag article excerpt:
The trend in firming home prices solidified in the second quarter with more metropolitan areas showing increases from a year ago, aided by a surge in home sales driven by the home buyer tax credit, according to the latest survey by the National Association of REALTORS®.

In the second quarter, 100 out of 155 metropolitan statistical areas (MSAs) had higher median existing single-family home prices in comparison with the second quarter of 2009, including 14 with double-digit increases; two were unchanged and 53 metros showed price declines. In the first quarter of this year 91 areas had higher prices, while only 26 MSAs experienced annual price gains in second quarter of 2009.

The national median existing single-family price was $176,900 in the second quarter, up 1.5 percent from $174,200 in the same period of 2009. The median is where half sold for more and half sold for less. Distressed homes accounted for 32 percent of second quarter sales, down from 36 percent a year ago.

Lawrence Yun, NAR chief economist, says the correction in home prices appears to have ended in 2009. “All year we’ve been seeing relatively flat national home prices, which appear to be supported by market fundamentals,” he said. “Prices in some areas remain below replacement construction costs, so even with an elevated supply of existing homes on the market we don’t expect any consequential movement in home prices for the foreseeable future. Very low inventory of newly built homes also will help to support home values.”

After being spun like that I feel dizzy.  With my eye on the NAR rear view mirror will I miss the "Bridge Out Ahead" sign?  I hope not.  Over the next week I plan several forward looking housing analysis articles.  Sorry, Dr. Yun, but the trend analysis I have done produces some different rear view mirror images than you have described. 

Disclosure: No positions.