Far From Over

Implications: A year's worth of new home inventory remains unsold. Regional banks are reporting losses, because of regional builders excess inventory. With increasing foreclosures, and at current building levels, the issues remain. Large projects will be next. Poor sales at destination resorts will start to impact this area--second home sales will decline sharply--already have.

Analysis: The market is attempting to create an illusion.  Just as I hear every day from local realtors that the market "has bottomed", and "it's a great buyer's market", so to does Wall Street want to create good news to get buyers back into the market.  Unfortunately, the reality of builders and destination resorts/golf communities renegotiating their financing tells the real story.   The market is still stalled and reversing.  Banks and builders/developers are at the stage where they are trying to minimize their losses--kind of a "loss-sharing" situation at the moment. It will be several years before the base is stabilized, and several years after that before we see any appreciation in prices.