As of about 10:30 a.m, Pacific time, the Wall Street Journal was feeling a little ambivalent about the state of real estate. On its main page, the headline for its stock market update read "Stocks edged lower as investors weigh a barrage of earnings reports and economic data showing a resilient housing market and consumer confidence." But just a few inches below that headline was another: "Existing-home sales fell 1.3 percent in June and the inventory of unsold homes reached a new record, in further signs of a slowing housing market."
I will leave it to the semioticians to argue over whether a housing market can be simultaneously "resilient" and "slowing," even though it's a challenge to see how a record number of unsold homes could be a sign of strength. Maybe the mixed signals are actually the Wall Street Journal's clever way of indicating that no one really knows where the economy or the housing market is headed. In the last two weeks we've learned that housing starts are down, mortgage applications are down, existing home sales are down and home builder confidence is plummeting. But the existing home sales figures didn't drop as much as expected, offering a a straw for optimists to cling to. And the recent moderation in how fast the market is declining supports the constantly reiterated reassurances from the National Association of Realtor's chief economist, David Lereah, that the housing market is "stabilizing" or "flattening out."
Maybe it is. I caught some flak last week from readers who took issue with my lack of faith in Lereah's sincerity. I certainly don't have the evidence to disprove Lereah's forecasts or interpretations. But in a case like this, I have to fall back on good old reporter's cynicism. Since I started closely following the housing market about eight months ago, I've noticed that Lereah consistently interprets the latest housing data in a fashion that aligns with the interests of realtors. Such confidence is not the stuff of faith-building.
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