Lots of confusing news – What’s going on?

So there seems to be conflicting news headlines about the state of the housing recovery every day.  Friday in the Journal Sentinel the article on the front page talks about the downsizing of the Parade of Homes this year.  “Three years ago, toward the end of the real estate boom, visitors paraded through 30 homes in two subdivisions in Waukesha and one in Mequon.  Now it’s one subdivision in Ixonia, Autumn Ridge, in Northeast Jefferson County.  Granite countertops, formal dining rooms and whirlpool tubs are scarce this year, and most of the garages are designed to hold two cars, not three.”  Hmm….Builders are struggling because there is so much inventory on the market and buyers are finding better value in buying an existing home.  Then go to last Sunday’s section of the paper and the article is titled “Home Prices: There’s No Quick Recovery Ahead”  It talks about the glut of empty homes on the market.  Next there was the case Shiller report “US Housing Market Could Be Facing Another Bubble: Shiller”  Friday housing sales came out and the headline reads “Existing Home Sales Rise at Fastest Pace in Two Years“  So what is one to believe?  The negative hype or the positive spin?  The truth of the matter is that a 7.2 percent increase in home sales does not amount to much on a local scale.  Take for instance Franklin, Wisconsin in July 2009 there were 28 single family homes sold.  7.2 percent amounts to 2 more homes sold.  Sure when you take the aggregate of the country at large and show a 7.2 percent increase that is really big.  Locally though, that’s another matter.  I think things will continue to stay level in our local market.  But on a national scale what’s really behind the numbers?  Is it first time home buyers trying to get their $8,000 tax credit while they still can?  Is it banks that are giving homes away to get them off the books?  Is it just that the summer months are typically the peak months for sales?  Is it because interest rates are so very attractive?   I think that to be bullish in this market is unjustified.  Until other economic factors improve like unemployment, retail sales, and manufacturing,  I think we need to be a realistic about the housing market.