You would think that with barely a week left in 2010 we'd have a better idea of where we're headed in 2011, but a new round of data seem to have the experts more conflicted than ever.
Home sales are weak, but improving, prices are weaker and flat to lower, inventories are pretty much unchanged in the face of a huge shadow inventory, and the foreclosures crisis threatens to get worse before it gets better.
The National Association of Realtors, at least their chief economist Lawrence Yun, claim that recovery is all about credit and jobs. If both improve, buyers will come back to the market in droves. Yun even claims that rising mortgage interest rates are less important than access to credit, and I think I agree, although I think there's a bit more to it than that.
In Tuesday's blog I discussed a slightly desperate letter from mortgage industry experts and economists to government leaders, begging for new standards to get credit flowing again. They seem to think credit is also one of the main barriers to recovery.
But home prices are more the talk at holiday parties right now. The Realtors reported today that prices were essentially flat nationwide in November, up just 0.4 percent, although other reports have shown them dipping again.
A survey of economists by MacroMarkets (Robert Shiller's organization of the Case-Shiller Home Price Index) found the vast majority see no home price appreciation in 2011 with a dimmer view than previous estimates on where we'll be even by the end of 2014—up just around 7 percent for the five year period.
On top of that Hovnanian reported pretty lackluster results, and CEO Ara Hovnanian said the housing market remains, "quite challenging." The only "silver lining" he could find were some good land deals. This after the CEO of DR Horton pretty much called the 2011 spring housing market hopeless.
It's important to remember, at this crossroads to the new year, that this is historically the slowest season for housing. Some data are seasonally adjusted, and some are not.
I think the uncertainty in the housing, and specifically the mortgage market right now, make predictions sketchy at best and dangerous at worst.