By Patricia L Johnson

Do you believe everything you read in the papers?  I think most people do – they consider certain members of our news media to be ‘experts’ of sorts and have a tendency to listen very closely to what they say.

The two places in this country where individuals can earn enough money overnight to be considered ‘wealthy’ is in real estate and the stock market. 

Did you ever wonder why certain items are released to the public and others are not?   When you think about it what does the average Jane/Joe who is going to work every day trying to support their family care about how many houses were sold last month or the month before?

Unless Jane or Joe are planning on selling their house in the near future, it has basically little impact on them, so why fill up the newspapers with report details?

My answer is the market – the reports are ‘key’ to investors that earn their living playing the stock market.  Reports, depending upon whether the news is positive or negative trigger market sales – yesterday was a prime example.  The New Housing sales report came out indicating only 834,000 homes were sold in the U.S. during the month of June 2007, which is a 6.6 percent drop from the prior month and a 22.3 percent drop from June of 2006.

The DJIA dropped 311 points and the newspapers will now be filled with doom and gloom reports of how the sky is falling. 

The sky may be falling, but probably not over housing – the way I see it the new housing market is doing pretty good and my opinion is based on a couple factors:

At the end of December 2006 there were 535,000 new houses for sale in the U.S.  At the end of March 2007 there were 548,000 new houses for sale in the U.S. and at the end of June 2007 there were 537,000 new houses for sale. 

The numbers tell me the new housing market is remaining pretty stable.

In 2005, there were 1, 283,000 houses sold per month. We already know that many, many of these homes were financed by banks and mortgage companies to individuals and/or families with poor credit.  These people were offered mortgage deals they couldn’t possibly afford which have resulted  in thousands upon thousands of sub-prime mortgage failures.  This trend will continue until such time as the housing market has been adjusted for these poor decisions.

As with everything else this administration presents; the methodology used for calculating new home sales has been tweaked and twisted so it’s very difficult to make month to month or year to year comparisons and receive percentages that are accurate representations of the facts.