There is a tendency amongst many analyst to forget about the context in which residential real estate market has stabilized.
To better demonstrate that context, I annotated the chart above (via Asha Banglore of Northern Trust) to show what actually took place the past year.
In terms of price, we know that not having distressed assets in the mix makes it appear prices are improving; what you actually are seeing are the impact of no foreclosures for a year.
Similarly, without as many distressed homes in the mix — they are often sold for less than replacement cost — New Homes have less competition, and sales can tick up.
Foreclosure machinery creaks back to life
Washington Post, June 23, 2012