SubPrime Sale Irony

Home sales rebounded in January, reaching the highest level in seven months, the National Association of Realtors said Tuesday. It was because of the warm winter they say.So slaes  rose 3%. And single-family homes showed the biggest sales increase, rising 3.5%.  Despite the dramatic rise in home sales in January, no one should overreact to the gain, analysts say. "I'm trying to be careful because we could see the next month down a little," says David Lereah, the NAR's chief economist.This because of  February 's Cold, which could cause a near-term home sales dip.

While sales jumped in January, there was still a downturn in existing home prices. Last month, prices fell 3.1% from January 2006 to $210,600. And the price softness is expected to continue until spring, Lereah says. Many believe the price decline is helping but inventories are still high.. That represents a 6.6-month supply.However the peak was 7.4 month peak in October.

As if home builders do not have it bad enough, a press release Lerach, Coughlin, Stoia, Geller, Rudman & Robbins LLP law firm, says the Beazer builder not only provided mortgage originations and title insurance  neglectfully causing some of the buyers to lose their homes through foreclosure.

Meanwhile UCLA  Forecast Says Subprime Fallout Has Consequences for the Country

I am glad I am a Trojan fan! The forcast released this week, contains both positive and negative predictions for the current economy and the subprime lending market. A recession is not imminent, but he does expect a period of below average growth in the U.S. that will last longer than originally expected.

  “For a housing market that has already witnessed starts declined by 36 percent this is not good news,” the report concluded. “We previously had thought that housing starts would bottom in the 1.4-1.5 million range; we now think the bottom could be around 1.2-1.3 million units with the risks still on the down side. Moreover, the recent weakness we have experienced in home prices will likely tend to accelerate with the nationwide peak to trough declines ranging from 5 to 10 percent,” according to the report.

UCLA report also says California, has a great future in job growth, with growth up to 52,000 and job creation rates up to 1.8 percent from 1.1 percent. However, when it comes to the real estate sector, economist Ryan Ratcliff did predict some sort of fallout in California. According to the report, Ratcliff, when discussing the topic of California, said, “We expect to see the pattern of deepening real estate (job) losses combined with a slowdown in the rest of the economy – now it's just the first half of 2007 instead of the second half of 2006

And to remind everyone about the subprime mess amidst the good sales news was, Irvine, California-based lender New Century Financial Corp.  whom officially filed for Chapter 11 bankruptcy on Monday.