US economy doing poorly

Monday’s weak US retail sales showed that the world’s biggest
economy is slowing very quickly, leading one economist to claim
America has gone from “first half hero to second quarter
zero.”  The 0.5% fall for June was far worse than expected and
the third monthly drop, the longest run of falling sales since
2008 when the Lehman crisis led America into recession.  “Given
how rapid the slowdown in job growth has been, it is hard to
blame consumers for their increased caution,” said Capital
Economics chief US economist Paul Ashworth.  Arguing that the
data showed just how quickly the US recovery has gone “from
first-quarter hero to second-quarter zero.” Ashworth believes
the slowdown echoes what we saw in the second quarter of 2010.
That slowdown ultimately led the Federal Reserve to launch a
second round of quantitative easing later that year, but Ashworth
believes Federal Reserve Chairman Ben Bernanke will need more
evidence before pulling the trigger on another round of easing.
“The bar to QE3 is higher than for QE2, if only because there
is considerable skepticism that balance sheet expansion will
accomplish much,” said Ashworth.

Really?? We have NO inventory !!

Home prices are finally turning around

Single-family home prices picked up for a third month in a
row in April, suggesting the recovery in the housing market
is gaining traction, a closely watched survey showed on
Tuesday.  The S&P/Case Shiller composite index of 20
metropolitan areas gained 0.7 percent on a seasonally
adjusted basis, topping economists' expectations of 0.4
percent. On a non-seasonally adjusted basis, prices fared
even better, rising 1.3 percent. Just three out of the 20
cities in the index saw declines in April on a seasonally
adjusted basis. "It has been a long time since we enjoyed
such broadbased gains," David Blitzer, chairman of the index
committee at Standard & Poor's, said in a statement. "While
one month does not make a trend, particularly during
seasonally strong buying months, the combination of rising
positive monthly index levels and improving annual returns
is a good sign." Compared to a year ago, prices were down
1.9 percent, beating expectations for a decline of 2.5
percent, and an improvement from the 2.6 percent annual
decline seen in March.

Inventory shortages stabilize home prices

The average home price for non-distressed properties
increased 1.7% from April to May, suggesting that a decline
in overall inventory is now pushing up prices, according to
the latest Campbell/Inside Mortgage Finance HousingPulse
Tracking Survey. The average price for a short-sale still
slipped 0.7%, while the price on damaged REO properties
increased to 1.8% and 1.5% for move-in ready REOs. In its
latest HousingPulse Tracking Survey, Campbell Surveys cited
declines in home inventory levels as one of the principal
reasons for home price stabilization, especially in areas
that have experienced large price declines in the past six
years. Multiple factors are causing the shortages—namely
homeowners keeping their houses off the market while prices
are still low. In addition, those who are underwater are
staying in place and cannot move until more of the debt is
paid down. The survey also says appraisals are keeping
prices down. The survey cites at least one real estate agent
in Florida as saying appraisals are keeping prices from
going up because appraisals that come in under the contract
price are stopping "natural valid appreciation."