Jul 11, 2012

Wells Fargo economists see 'budding recovery' in housing, but don't get too excited

Wells Fargo Securities senior economists Mark Vitner and Anika Khan say the nation's housing market is improving, but that new home sales and construction are nowhere near what they once were. It is really great to hear economists "observe" that new home sales are "improving" - but I dont think it takes a major MBA and a fancy corner office to determine that they are "nowhere what they once were". My fourth grader  - if given the numbers - might be able to deduce that one number is greater than the other.

"Even with the overall economy slowing, the budding recovery in the housing market appears to be gradually gaining momentum," the two economists say in a July 5 report to Wells Fargo (NYSE: WFC) clients. "We have continuously stressed the need to keep the recent improvement in the housing market in perspective. Even with the recent gains, new home sales and residential construction remain shadows of their former selves."

In January, Vitner made headlines, at least in the San Francisco Business Times, by saying a "true" housing recovery could be a decade away. He's sticking to that prediction. At least that's what he told me when we met over coffee earlier this week. He was visiting from Charlotte, where the heat wave was shattering records, so he was eager to share with me his immediate impressions of the Bay Area: the weather's cool and the economy's hot.

No comments: