Home sales in January fell to the slowest pace since 1999, says the National Association of Realtors, nearly 24 percent below January of 2006. But in the crazy world of economics, that's good news.

After learning that home sales dropped less than half a percent in January, Wall Street's traffic light turned green, because the news was better than expected. Single-family home prices made an attractive drop of five percent from a year earlier to a median price below $200,000. Condos dropped only one percent year-over-year to $220,000.

But Realty Times still recommends looking both ways before crossing the intersection. Buyers are standing in the road, and other news could blindside housing again.

First, January sales had a bit of a tailwind with interest rates under 6 percent for the month, and at times as low as 5.50 percent. Since then, inflation fears have caused bond-yields to rise sharply, taking long-term mortgage interest rates with them.

A survey by the National Association for Business Economics found that 45 percent of its members, which are economists, feel there will be a recession this year. That's way up from 25 percent six months ago.

The scarier threat is inflation, or worse stagflation, where the economy doesn't grow, but things cost more.

The N.A.R. also reported that inventories rose to a 10.3 month supply of homes on hand, 18 percent higher than the year before. If mortgage interest rates continue to rise, that could get worse.

And the credit crunch is still going on -- the liar loans are all but gone, and consumers who overspent when loan rates were lower are finding that they can't keep up with their credit cards either.

Let's not forget that the Federal Reserve reported in January that more than half of its member banks surveyed said that they tightened their standards for prime mortgages to the highest levels in 17 years, and more than 80 percent were tighter on non-traditional loans.

That alone suggests housing has further to fall -- if loans are hard to get, then the outlook for late winter housing sales isn't good.

So homeowners, sit tight. This isn't the time to try to run the yellow light. Don't put your home on the market unless you absolutely have to.

And buyers -- there are bargains out there, so don't wait for the bottom. By the time you hear about it, it will already be gone.

Published: February 26, 2008

Use of this article without permission is a violation of federal copyright laws.

Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.