Homebuilder Confidence at 2 1/2 Year High Yet Still in the Gutter; Huckster Hype Returns to Las Vegas

Homebuilder confidence is up again, but the headline does not tell the real story. Please consider Homebuilder confidence at 2-1/2 year high in May

The NAHB/Wells Fargo Housing Market index increased three points to 22, the highest since August 2007, the group said in a statement. It was the second straight month of gains in the index. In addition to the tax credit, builders were also cheered by growing evidence that economy’s recovery from the longest and deepest recession since the 1930s was gaining momentum.

All three subindexes of the Housing Market Index, including a measure of future homebuilding activity, saw decent gains this month.

“This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home are taking the place of tax incentives to generate buyer demand,” said NAHB chief economist David Crowe.

The current sales conditions gauge rose three points to 23, the highest since July 2007. The sales expectations measure for the next six months also gained three points to 28, the highest in six months. The traffic of prospective buyers index increased three points to 16, the highest since September.

Traffic is up to 16 and David Crowe is excited? The only thing that remotely looks like it is headed up is “sales expectations” sitting at 28.

Even still, on the diffusion index, 50 is the break even point.

Huckster Hype in Las Vegas

The New York Times reports Building Is Booming in a City of Empty Houses

In a plastic tent under a glorious desert sky, Richard Lee preached the gospel of the second chance.

The chance to make money on the next housing boom “is like it’s never been,” Mr. Lee, a real estate promoter, assured a crowd of agents, investors and bankers. “We’re going to come back like you’ve never seen us before.”

Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty