Real Estate Analyst Jurow: Housing Market's in Trouble

Thursday, 28 Aug 2014 10:08 AM

By Dan Weil

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While some financial commentators got excited by last week's news that existing home sales rose 2.4 percent in July, evidence abounds that the housing market is slowing down.

New home sales fell 2.4 percent last month, the lowest rate since March. And the S&P/Case-Shiller index of home prices for 20 major cities slipped a seasonally adjusted 0.2 percent in June.

"I never bought into the idea that we had a [housing] recovery at all," real estate analyst Keith Jurow, author of the Capital Preservation Real Estate Report, tells MarketWatch. And he thinks home prices will keep sliding.

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That's because the number of home listings is rising while prices start to slide. For example, listings have jumped 28 to 89 percent during the 12 months through June in Fort Lauderdale, Miami, Charlotte, N.C. and Riverside, Calif., he notes.

"If sales are weakening and listings are going up substantially, prices will fall," Jurow explains.

"Many people waited for prices to rise before putting their house on the market, and they have," he adds. "But now listings are increasing because everyone has the same idea. Unfortunately, May and June are traditionally the strongest months for sales, and these home sellers have missed the peak season."

Others agree. "We're seeing more inventories coming on line, which is putting downward pressure on prices," Anika Khan, senior economist at Wells Fargo Securities, tells Bloomberg. "In general, we have seen prices rise at a faster pace than the fundamentals would call for."

To be sure, not everything is bleak. "Other housing indicators [aside from the Case-Shiller index] — starts, existing home sales and builders' sentiment — are positive," says analyst David Blitzer of S&P Dow Jones Indices, according to The Wall Street Journal.

"Taken together, these point to a more normal housing sector."

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