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After a huge run up in the hottest housing market ever, it is not exactly shocking that things are coming down closer to levels more in line with the historical trend. Of course by cherry-picking data it is quite easy for the bubble heads to try to convince everyone the sky is falling. Of course looking at the regional data, the west did get hit pretty good. Home sales in the midwest though were actually up slightly.

The cherry picking of the stats is obvious. Home sales are comprised of 80% existing and 20% new. Since home prices got so out of wack it was to be expected that sales would slump as inventory built due to customers finally saying "enough" to rising prices. AS existing home sales lagged so then did new home sales since the majority, by far of new home purchases are made by those selling existing homes. Latest reports have existing home sales up a huge 3.0% in January and that makes 5 of the last 6 months that they have risen. As these numbers continue the new home market will likewise reverse and the new leg on real estate will begin.