If industry analysts will just look at recently released data, it showed that the real estate market is on its way to recovery. In June, new home sales rose by 11 percent, the highest in eight years. The number of unsold houses dwindled while housing starts rose in the two consecutive months of May and June.

Furthermore, the monthly home prices in 20 major metropolitan areas in the country are showing some stabilization based on the Standard & Poor’s Case-Shiller Index.

However, data did not impress some industry analysts as they looked at the overall scene in the housing market.

They said that the overall housing market is still soft, noting the long time it takes to sell a property, the difficulty of many borrowers to obtain financing and challenges facing lenders and appraisers.

The only silver lining in the current grim scene is the flood of first-time buyers and speculators who were enticed by discounted prices and the $8,000 tax credit.

Industry analysts who do not seem to see any turnaround in the housing market explained that declining property prices is not yet over. Center for Economic and Policy Research co-director Dean Baker said that it is wrong to assume that the housing market has reach a turning point, noting the oversupply of houses, including bank owned foreclosure homes, which means property prices will continue their downward movement.

Industry analysts noted that many potential buyers are taking their time making a purchase because they are not sure if they still have jobs in the coming months. Added to that is the lackluster results of government efforts to prevent foreclosures, including mortgage modification programs and foreclosure moratoriums.

Yardeni Research economist Ed Yardeni said that a solid recovery in the housing market should start with controlling the rise of unemployment which has now a national average of 9.5 percent and is expected to jump to 10 percent by the end of 2009.

Assistant professor and Oregon Economic Forum director at the University of Oregon Timothy Duy said that a fast recovery for the housing market means a return to the 2006 mortgage market wherein lenders did not give attention to the growing household debt levels and not so good credit histories.

He said that there will be no housing recovery unless conditions return to the period wherein loans are provided to almost everyone.