Home Sales Going Up or Going Down?

Newspaper articles such as the BBCs blare: Surprise dip in US home building.

Construction of new US homes posted a surprise fall in July, ending three straight months of increases, Commerce Department figures have shown.

Suggesting the housing market recovery remains weak, the number of new properties built last month fell 1% to an annual rate of 581,000 properties.

And yet July single-family starts were strongest since October, and have risen 5 months in a row. What accounts for this? Well maybe that multi-family starts are considerably more volatile than single-family?I still think that things are getting better. We'll see how multi-family starts go in the next few months. NY has definately not climbed out of its doldrums but the moment it the national economy is and is perceived to be growing than NY real estate will do just fine.

Forecast : Upturn in US Home Values: Leading Indicators are Bullish on Real Estate

ECRI's U.S. Leading Home Price Index (USLHPI)which was "designed to predict cyclical turns in real home prices, has now been rising for five months." ECRI's data is made available only to clients and as MHN is not a privileged client we are not privi to the data behind the ECRI graphs. However they are a trusted source and their conclusions are quite promising.

The implication is clear: this is a genuine cyclical upturn in the level of the USLHPI. Such an upturn in the USLHPI amounts to a forecast of a cyclical upturn in the level of home prices this year…"

ECRI’s apparent optimism about the economy is very much at odds with a stubbornly downbeat consensus. When almost every seasoned analyst is so pessimistic, doubts about the likelihood of an upturn are entirely understandable.

But we also know that this is precisely the phase of the business cycle when, in the wake of a major crisis, a “giant error of pessimism” runs rampant. It is therefore especially important to remember at this juncture that the opinions we express are based not on our gut feel, but on a system of objective leading indicators with a stronger theoretical foundation and a more rigorously tried and tested record that any others in existence. Its real-time track record is also unrivaled. Our confidence in their predictive power is based on long experience with these indicators.

While more analysts are coming around to our view about the economic recovery, there are plenty that remain doubtful. Only the reality of the recovery will convince such skeptics, but by then it will be much too late for decision makers to take timely steps to stay ahead of the curve.

We understand that some will be incredulous about our home price upturn call, coming on the heels of our business cycle recovery forecast… it is worth remembering that our apparent boldness is merely a reflection of what our objective leading indexes are telling us today."

As stated earlier ECRI is a trusted source. It is unfortunate that I don't have the data from which they derived this conclusion. If this is true it will have a substantial impact on NYC real estate. Real Estate prices is based upon demand and people are here because of the jobs.

Now before it sounds as if I have nothing but praise for ECRI let me say that they are professional contrarians and make their money by having people buy their data and their analysis. They spend a lot of time upselling their products. I read one of their books, "Beating the Business Cycle," and too much of the book was spent praising ECRI and upselling their data.

Di Fara's Pizza

Possibly the best pizza in NYC. If you love pizza and are in NYC you must go as the owner and chef is in his 80s and will not be with us forever.

Toll Brothers

Toll Brothers showed their first annual increase in signed contracts in four years. A 3 percent year over year increase, mostly in the luxury end. And, what I find most promising are that cancellation rates, now at 8.5 percent, are returning to historical levels of 7 percent and that incentives are being removed and margins are increasing.