Tags: Jurow | housing | bottom | sight

Minyanville’s Jurow: No Housing Bottom in Sight

By John Morgan   |   Tuesday, 20 Nov 2012 12:54 PM

Housing prices in the United States are at a false bottom because of bad reporting data, and the distortion masks the fact prices in many areas have further to fall, according to Keith Jurow, author of the Minyanville Housing Market Report.

“If I saw a bottom, I would say it,” he told Yahoo.

“There is no housing bottom in sight.”

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

Jurow discounted the latest monthly report from the National Association of Realtors (NAR) that showed a year-over-year increase of 11.1 percent in median prices in October.

“I don’t pay much attention to median prices because they are very deceptive. Banks around the country are not foreclosing,” he said

Because homes that eventually will be foreclosed on are not included in the data, the true state of housing is hidden, according to Jurow.

“If you eliminate sales of the lowest priced houses, it’s going to push up the median price in almost any market. That doesn’t mean the market as a whole in that area is improving.”

Jurow said a more accurate measure of housing prices comes not from median sales figures calculated by the NAR or other sources, but from raw sales numbers recorded by real estate brokers.

For instance, he noted, while median prices for October were reported up 25 percent year-over-year in Fairfield, Conn., the actual price per square foot was down 6 percent during the same period.

“So there’s a big discrepancy,” he told Yahoo.

The fact banks are sitting on “shadow inventory” merely delays the eventual reckoning in housing prices, according to Jurow. But he said the leftover effects of easy credit are an even bigger reason for a poor real estate market.

“The cause is that we had the biggest credit bubble in our history,” he said.

“Great credit bubbles never end softly.”

The NAR reported that the number of previously owned homes on the market decreased 1.4 percent in October to 2.14 million, the fewest since December 2002. At the current sales pace, it would take 5.4 months to sell those houses, the least since February 2006, and down from 5.6 months at the end of September.

In addition, existing single-home purchases climbed in three of four U.S. regions in October, reflecting a 4.4 percent increase in the West, a 2.1 percent gain in the South and a 1.8 percent rise in the Midwest. Demand fell 1.7 percent in the Northeast as Superstorm Sandy disrupted the market there.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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