NAR reporting housing recovery likely this year

David Lereah, NAR’s chief economist, said there is some ambiguity about the current housing market. Due to unusual weather patterns and problems in the subprime lending marketplace. Existing-home sales are expected to slowly improve from what appears to be the cyclical low last fall, but we think there will be some additional pain in the new home market, which hopefully will start to rise later in the year.”

“Lending problems in our nation's subprime marketplace are building, which could inhibit future housing activity and further dampen our forecast. Even so, these problems are likely to be contained and not spill over into the prime mortgage market.”

For critics who don’t understand the weather impact on seasonally-adjusted sales, Lereah explained we’re likely to be reminded about the consequences throughout this spring. “Here’s what’s happened and how it’s likely to play out. In December, unusually mild weather brought out shoppers and January existing-home sales rose,” he said. “However, a sudden chill in January slowed shopping activity relative to December and pending sales, based on contracts, fell.

“We have yet to see the biggest weather impact – February’s winter storms brought markets to a halt in much of the country, and it was the coldest February since 1979 – that should drag sales down in March,” Lereah said. “This means we may not see an upturn in closed transactions before May 25 when we report sales for April.”

I'm not sure how this affects our Southern California market. We are noticing an improvement in activity of buyers.