Bullish on housing

Forget that lackluster GDP report this morning -- the housing market might not be as bad off as we're being led to believe. That's what Business Week's Toddi Guntner is saying on her blog. Well, she isn't saying it, Michael Youngblood is. Youngblood, managing director of asset-backed securities research at Friedman Billings Ramsey & Co. in Arlington, Va., has California showing a 24.1 percent jump in median year-over-year home prices in the first quarter of '07 -- and 26.7 percent in L.A. He uses his own economic model that forecasts housing prices in 379 metropolitan areas. Hmmm. On another BW blog, L.A. correspondent Chris Palmeri says the monthly numbers can leave people scratching their heads. Here's his take:

Sales are down, but prices are up? What does that mean? In their quest to interpret such data, reporters and analysts often choose whatever number best illustrates the point they want to make. BusinessWeek Online reader Frank Pecarich notes how one Sacramento writer highlighted the number of homes on the market as being the highest since the early 1990s, but failed to say that the population has grown since then. As a percentage of the market, those inventory numbers might not be that bad. Another one to watch out for as housing prices slow, many markets are still reporting year over year increases in prices. But in some cases those same prices have declined in recent months. The big picture clearly shows the real estate market slowing. Right now though it looks much more like a soft landing than a crash.