Is the Housing Market in a Double Dip?

This past Fall it seemed that the housing market was making a comeback.  There were reports that price declines had leveled off in many areas and had even come back up in a few cities.  Existing home sales had improved from the depths of the recession, although some of that activity was due to the sale of distressed properties.  New home sales have yet to show real signs of improvement.

Along with those reports were a fair number of warnings that the recovery, if that’s what it was, might not be sustainable.  Without significant improvements in employment and wages, it was projected that home sales would falter again.  With many people exhausting their unemployment benefits there could be another round of foreclosures looming on the horizon.

HousingWire reports on the National Association of Realtors (NAR) finding that sales of existing homes have declined for three months in a row through February.  Granted, some of the drop-off in February may be attributable to the snowstorms in the Eastern part of the country – but that’s only part of the country for part of one month.

In a separate article HousingWire reports that the Federal Housing Finance Agency statistics show a decline in home prices in January and February.  The article quotes Paul Dales of Capital Economics as saying that we are now in a double dip as regards real estate sales.  Increasing signs of stress in the system, according to Dales, indicate that the market will continue to worsen.  No prediction was made as to how much more of a decline is to be expected or how long until the true bottom is reached.

Recent unemployment figures have shown a significant slowing in the numbers of jobs being lost each month.  The Obama administration would like us to believe that we are close to turning the corner and start adding jobs, although not in significant numbers for a while yet.  If the job engine does not get into gear soon, we’ll have to look to other factors to prevent the real estate double dip from becoming more serious.