Economists at the National Association of Realtors cite a 1.7 percent drop in August home prices. "We've been anticipating a price correction and now it's here,'' said David Lereah, the NAR's chief economist. "The price drop has stopped the bleeding for housing sales. We think the housing market has now hit bottom.'' Not so fast, says Bob Hynes, senior market analyst at IFR Markets. "This is not the first time we have heard an industry group claim that the market has bottomed. It is also the umpteenth time we have heard that shares are attractively priced." While L.A.-based KB is trading above its 52-week high, Hynes is warning investors of a "dead cat bounce" (Wall Street talk for a short-term recovery that masks a long-term decline). For what it's worth, August home prices in L.A. County were up, not down, which makes you wonder about the extent of the price correction.
*More mixed signals: This time from the California Association of Realtors, which reports August home sales plunged 30.1 percent from a year earlier. That's the steepest drop in 25 years, but remember, year-over-year comparisons are tricky since last year's sales were so strong.