• by Thom Forbes  @tforbes, February 27, 2013

You’d be forgiven if, after glancing at the business page headlines this morning, you are left wondering what’s up, besides home sales, because everything feels like it’s down but nobody wants to believe it. 

There’s a shortage of homes on the market and real estate sales are soaring -– up 28.9% in January from 2012 for new homes and 9.1% for those previously owned, according to Commerce Dept. figures released yesterday. But there are caveats to any glee you may be feeling (see below).

The stock market is rattled but steadying over the Italian elections. Federal Reserve chairman Ben Bernanke’s testimony before Congress provided a “balm” against the threat of sequestration, which, most observers tell us, is all but certain to kick in on Friday, but which most jaded citizens seem to be facing with the expectation that “these knuckleheads come to their senses” before real pain happens, as one observer tellsTime’s Alex Altman.

Then there’s Forbes publisher Rich Karlgaard’s opinion piece in the Wall Street Journal this morning, which uses Wal-Mart’s 4Q results last week to provide a lens for suggesting that it’s not only the “Bentonville Giants” who are facing “a long season of headwinds.” Although Reuter’s Brad Dorfman and Jessica Wohl dubbed the 1% same-store sales rise as “not as bad as the market feared after a Bloomberg report” that cited a worrywart’s internal email about February MTD sales and concerns about payroll taxes and delayed tax returns, Karlgaard cites several other reasons why the anemic sales gain could “herald another recession.”

Food and gas prices are rising, for one thing, and Wal-Mart shoppers have a higher unemployment rate than the rest of the nation, for another. If this represents “the new normal,” Karlgaard says “consumer spending is in trouble -- and with it, the fortunes of both Wal-Mart and the U.S. economy at large.”

So what about the rebound of the housing market? Doesn’t that count for something? Indeed, “Home prices in 20 U.S. cities rose in December by the most in more than six years, a sign the housing-market recovery is strengthening,” Bloomberg’s Michelle Jamrisko writes in her lede. “The S&P/Case-Shiller index of property values increased 6.8% from December 2011, the biggest year-to-year gain since July 2006, after advancing 5.4% in November.”

New construction is the most robust sector of the market –- a testimony to salesmanship as well as the lingering effects of the bottom falling out of the market in 2008. 

“The strong sales of new homes also show how the nation's home builders have mastered the art of selling, even to cash-poor buyers or those with spotty credit histories,” Robbie Whelan and Conor Dougherty write in the Wall Street Journal, pointing out that this is taking place despite the fact that a new home typically costs 37% more than one already built, according to an analysis of the market by Barclays Capital. That’s the widest gap since it started tracking the prices in 1968.

“In the past two years, more home builders have offered to pay closing costs and arrange home loans through in-house mortgage operations,” Whelan and Dougherty report. “They have hosted free credit-counseling sessions for buyers with bad credit scores, and made heavy use of government-backed mortgage programs that allow buyers to get a home with little or no down payment.”

USA Today’s Julie Schmit cites other reasons for the paucity of homes on the market, including “tight lending conditions, a shrinking number of distressed homes for sale, and millions of owners with little or no equity in their homes.” 

More than 25% of homeowners still owe more than their home is worth on the market, and about 45% have less than 20% equity, Schmit reports -– an amount generally needed “to sell, pay a Realtor commission and still have a hefty down payment to get the most attractive loan terms to buy again.”

"They are stuck. They are zombies," California-based housing expert Mark Hanson tells Schmit. 

(Reminds me of Lisa Arthur’s “zombies-do-not-belong-in-your-marketing-plan” piece in Forbes a few months ago. “In talking one-on-one with lots of marketers over the past few weeks, and I’m finding that far too many are bogged down by the undead -- not ‘creatures,’ of course, but strategies and tactics that are now out-dated, ineffective and well, simply useless,” she wrote.)

Meanwhile, Home Depot posted better-than-expected earnings and sales results (up 13.9% for the quarter) “helped by a nascent recovery in the U.S. housing market,” Reuters’ Dhanya Skariachan reports, but also by rebuilding in the wake of Hurricane Sandy –- proving again that there’s usually a silver lining in the storm clouds if you look hard enough.