This chart says it all: houses sales are way up, the boom is far from over!
Or is it?
The chart does tell us one story. Unit volumes are way up in March, reversing the recent decline in unit sales, and are almost at their highs for that month.
However, what it doesn't say is why this is happening. Many home builders have been affected by the current stockpiles of home. Of course, they don't make money building the houses, they have to sell them. Current stockpile in the US is around 5.5 million houses! What has been happening is that these homebuilders are now throwing in rebates and upgrades worth tens of thousands of dollars in order to get rid of the inventory.
So the houses do sell, but the profits these firms make will be going down.
And the reality is, for normal people, once you have a house, you don't need another one. So all these sales at firesale prices are done, leeching away at future sales.
An equivalent example is what has been happening with car sales... Car sales started coming down in 2000/2001 pretty badly, especially for the American Big Three, so they started cranking out bigger and bigger rebates, even offering temporary zero financing to help out America after 9/11... these temporary measures are still here with us five years later, and can you honestly think that they can remove them ? Especially with gas pricing coming up as they are, if there is no major incentive to buy the car, you'll probably stick to what you have....... and cars are not eternal, they do have to get replaced once in a while... a house, not really...
So expect house prices to come further down. Too much inventory, rising foreclosures, rising interest rates, ARMs resetting at higher rates, speculators unable to meet payments, higher unemployment... all conspiring.
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