The News Is Good (Sort Of)

U.S. New-Home Sales Climb 11%, Most in Eight Years
By Courtney Schlisserman - July 27 (Bloomberg)

Purchases of new homes in the U.S. climbed 11 percent in June, the biggest gain in eight years, underscoring evidence that the deepest housing slump since the Great Depression is starting to stabilize.

That was the news being sent around yesterday. Whoopee! Good news! Rarer than diamonds in this business nowadays, good news is greeted with relief and some air of triumph. "This is it," the guilty-smug smiles tell you. "We rode it out!" We try not to congratulate ourselves, but we're so desperate we can't help ourselves.

We used to congratulate ourselves for much loftier accomplishments - market share, million-dollar sales awards, multi-million dollar development listings. Aaaah the good 'ol days. No more. Today's mantra is "If I ride it out, at the end of the storm I will be stronger and better than ever!" Translate that as: "If I can hang on without losing my dignity I'll be the only one left when its over!" Clinging to dignity has become perilous in this market, no doubt, but I consider it my version of "Survivor".

Of course, that strategy is completely counterintuitive to all the training you've gotten, which has told you that each challenge is an opportunity for success. But when chasing down the status of a short sale turns into a real-time exercise in "Who's on first?" the training-manual ideas seem ridiculous. Today, the formulas for success that get stamped on binders and re-printed in handouts are dated, irrelevant and comical, from my point of view. I can't chase around my homeowners for referrals when a good chunk of them are on the brink of losing their own homes. I can't throw parties with branded merchandise when I'm trying to figure out how to pay for my kids' birthday party with dollar-store cups and plates. My sphere of influence is panicking, just like everyone else.

So, of course, when the good news comes along, I'm eager to share it, take some completely undeserved credit for it, and convince myself I can treat my family out to dinner because of it. But, as with all things, good news is not all it seems on the surface. And this is the sentence in the above-referenced article that woke me from my sugar-induced euphoria.

"The number of houses on the market dropped to the lowest level in more than a decade."

You've seen it yourself. There are less signs on the street in many Chicago neighborhoods. Looks less frantic. Good, yes? Maybe. But what, really, does it mean?

Yes, we've done a good job clearing out alot of the bottom-dwellers in the market, but there's plenty more where that came from. Yes, we've made significant headway in removing at-risk homesellers from the inventory through the influx of short-sales, but who isn't short these days? And yes, some homesellers have decided to pull back and wait for a better selling season. My kingdom to know when that'll be.

When you're looking at numbers, stand in the center and look around. Then stand in every corner of the room and look inward. Make sure you understand what's good and bad in the statistics. No question that increased sales and diminished inventory will be indicators of improvement. The fact that we're looking at those now instead of consistent downward slides is, indeed, good news. But because we didn't sink in one tragic misstep, we won't be redeemed in one cathartic leap forward. Instead, we'll struggle forward in fits and starts, with some good days and some bad days. The challenge is to continue forward. We do.

As for the hope promised in the article from Bloomberg? I think suggesting an overall start toward stability may be a Jordan-esque reach toward that evasive moment in the cycle when we can really claim triumph, pat each other on the back, and pay un-borrwed cash for that meal out with the family. I'm going out to dinner anyway. We got some really good news yesterday.