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Stabilizing Instability

Stabilization. That’s the buzzword today from the number crunchers/housing prognosticators at theNational Association of Realtorsin its quarterly metro home price report. “Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction, with a modest gain from the fourth quarter,” says NAR senior economist Lawrence Yun (yes, the exalted David Lereah is gone).

Here’s their reasoning. Sales and prices are still down in the first quarter of this year from a year ago, but the “down-ness” is up from the fourth quarter of last year. I’m also happy to report that prices are still ridiculous in most of California, up to ten times the price of a house in Elmira, NY (ok, location location). Condo speculators are honing in on Salt Lake City, Utah, where prices for little boxes rose almost 26%, and apparently there’s some good news for Washington, DC, where the first quarter resale pace rose 9.3% from a year ago. Of course I’ve been saying that for months, as I watch houses on my street fly off the market over a weekend.

So are we ready to say this is good news? As the Ginsu guy always says, “but wait, there’s more”: Monthly foreclosure data out today from ReatlyTrac shows activity dipped 1% in April from March, but is up 62% from a year ago. I sat down with Rick Sharga, one of the company’s chief number crunchers this morning, and tried to get some perspective on this number.

“Actually we were disappointed that we only saw a 1% dip in April in terms of foreclosure activity – April usually heralds the beginning of the spring buying season if you will in the real estate market – and for the last 2 years that we’ve done the report – we’ve seen a bigger dip in April than we saw this year – effectively the numbers were flat.”

Sharga says, historically speaking, we’re not anywhere near the days of the dustbowl, mostly because banks and lenders and politicians and community activist groups are stepping in fast to help homeowners in default (yes, once again the big bad media is likely to blame for that), but he is definitely concerned…about that 1 trillion dollars worth of adjustable rate loans that have yet to reset and that could send thousands more Americans into fiscal fits.

So before anyone looks at today’s numbers and says, prices are dropping less than they were and foreclosures are slowing down, let’s all rejoice because the housing market is “stabilizing,” I would urge them to look behind the numbers. Focus on the year-over-year stats as opposed to the monthly or quarterly trends. Look ahead to the ever-changing mortgage market and the continued residue of all that “frothy” lending. The Spring market was a major disappointment in much of the country, and now we’re heading into storm season where we get to watch houses toss about in the wind and water. I say we’re still in a housing hole, and in some spots we may be digging in for a long sit. What do you think? Let me know. RealtyCheck@cnbc.com

Questions? Comments? RealtyCheck@cnbc.com

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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