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March 27, 2012 – 5:02 pm

Last week’s data on housing was slightly negative with a small sliver of good news in prices. Pending homes sales on Monday fell .5% for February from a growth of 2% the month before and this morning the Case-Shiller prices, which is a report on prices in 20 large metro areas in the U.S. fell .8% a slight improvement from the fall of 1.1% from the previous month’s report. However, that previous month’s report is very old, looking all the way back to January.

Real estate appears to be bottoming but there is still a large overhang of foreclosures. 2012 should see the bottom of the market but it is going to be a process. It is struggling to achieve sales, hold prices steady and work to get inventories down. The builders have done a good job in reducing new home inventories and holding prices steady in the most recent report but the same cannot be said for existing homes.

Housing is one of the most important parts of our economy. The reason why our recovery from the last recession is so weak is that the housing market is not expanding. Sometime next year or the year after it should begin to be a net positive, though very small, rather than a drag on our economy which has been the case for years.

Good Trading,

Steve Peasley

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