I hope I'm not correct, but here's why I think the real estate market is a dead cat bounce and not a recovery.
http://www.latimes.com/business/money/la-fi-mo-fha-federal-housing-administration-bailout-20121116,0,1915053.story
The FHA is saying its in a situation where they're going to need a bailout because of all the defaulted loans they insured. If this is true then obviously they're very under capitalized and the only way they're going to be able to meet the requirements for the insurance they sell is to get bailout money from the government. Of course this money will have to come from the Treasury issuing more bonds bought by more FED inflation to paper over these losses.
Basically no one can get a housing loan at this point unless its an insured loan. Because of this the FHA is a very large portion of the housing market at this point and will continue to be a very large portion of the housing market if they want to have a housing market for the foreseeable future because nobody wants to take on mortgage backed securities unless they're insured.
Interestingly enough, a lot of the subprime loans that blew up the housing market the last time became the primary customers of the FHA. So that's why at this point the market is largely proportioned toward FHA.
This IMO is a strong indicator that the real estate market is likely just in a dead cat bounce. Adding to that, I still just don't see enough wages to afford current housing prices enough to have a real estate market recovery. I just don't. I hope I am incorrect though.
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