Existing Home Sales Down 19.3%

As we noted earlier:  As expected, year-over-year sales and prices continue to get punished. The monthly year-over-year existing home sales fell 19.3%, while the national median existing-home price was $200,700, down 7.7% from March 2007. Total housing inventory rose 1.0%, a 9.9-month supply.

February to March sales numbers were down 2.0% (seasonally adjusted) to an annual rate of 4.93 million units — far worse than we expected in our earlier discussion on seasonality. Note that the non-seasonally adjusted monthly data actually rose, to 374,000 sales.

Lawrence Yun, chief economist for the NAR, was much more circumspect than usual. He noted that buyers face more restrictive lending practices, and that potential buyers remain on the sidelines. Surprisingly, Yun also was cautious about additional Fed cuts, saying: "With elevated inflation, the Federal Reserve should be extra careful about further rate cuts."

I have one picayune disagreement with their data release:  "Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets."

We simply do not see that in the data. If the NAR were to break down sales in $100k increments (>$100k, $100-200, etc.) we would be able to track what sections of the housing market were doing better or worse.


Existing Home Sales, NonSeasonally Adjusted


Chart courtesy of Calculated Risk



Existing-Home Sales Slip in March
NAR, April 22, 2008

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What's been said:

Discussions found on the web:
  1. Chris Martenson commented on Apr 22

    One wonders…how many of those ‘sales’ were REO takebacks?

    As long as a REO transaction is conducted through a realtor, then it counts in the NAR ‘sales’ data.

    Which means we are not actually comparing apples to apples. In ’05, ’06 and most of ’07 REO/Realtor transactions were negligible.

    Now? Could be 10%-15% of the total?

    I sure wish they’d break that out…

  2. Rich Shinnick commented on Apr 22

    To summarize:

    1. Prices falling

    2. Inventory Up

    3. Sales Down

    4. Mortgages Hard To Get: Especially Jumbo

    5. Foreclosures Up

    Yawn. Anything new here?

  3. steve commented on Apr 22

    Who cares if the Fed cuts rates again? Bernacke can’t reach across the pond and tweak LIBOR… and most of the garbage mortgages out there are pegged to LIBOR not Treasuries. The run on the banks is no longer a problem just for the US.

  4. AGG commented on Apr 22

    Year after year, the Bush people come forward and say how great the economy is, and that’s full of crap. Since Bush has been President, median family income has gone down. For working families, it’s gone down hundreds of dollars. Five million more people have slipped into poverty. Eight million people have lost their health insurance. Three million Americans have lost their pensions. And we have lost millions of good-paying jobs.
    — Senator Bernie Sanders (I-VT)

    Samuel Clemens (Mark Twain) used to say that a gold mine is a hole in the ground with a liar on top. NAR is an organization with liars inside.

  5. katelab commented on Apr 22

    What makes you believe the NAR numbers any way? I have read they are posting the good data and not including some low sales numbers in Sarasota. The realtors were afraid some of the low prices would “improperly” skew the data.

    Why should we ever trust data from sales people? Trusting sales people does not work on wall street either IMO.

  6. Kris Tuttle commented on Apr 22

    Saw another brand new McMansion in Westchester on Sunday that had been sitting so long it’s starting to attract vandalism. I think the price has been reduced from $1.7M to $1.3M but now you probably have to take another $100K off just to fix it back to what it was a month ago. If these properties stay on the market they’re going to get much cheaper.

  7. J. Bridges commented on Apr 22


    Off topic, but if we close on/near the lows today, you might want to fire up the Troll Shields to full strength. If this “surprise” brush with reality keeps up, and I’m assuming the market gnomes will make a few attempts to pump us back to 1380 on the S&P, 12750 Dow, we’ll have some fun bulltard comments to look forward to.

    Bulltard: (BOol’-TArd) noun
    1. A dishonest shill who touts the virtues of equities at any price, often at the beginnings of bear markets.

  8. Alfred commented on Apr 22

    “Note also that the non-seasonally adjusted monthly data actually rose, to 374,000.”

    I tried to understand the 374000 number of March (NSA) existing home sales, but number I get after doing the math is 410832. I trust that my math is wrong so if anybody could explain to me how to calculate the 374k I would very much appreciate it.

  9. michael schumacher commented on Apr 22

    And one more nail in the coffin of California making a “comeback” anytime soon.


    And keep in mind these numbers are for filed NOD’s, the pace of foreclosure far exceeds the filings by almost 5:1

    BTW for those who do not know that filing a n NOD (notice of disclosure) you have to have that nasty exercise known as “price discovery” and we all know how popular that is with banks today.

    At the rate it’s going….blowing up the inland empire would be one call that Cramer got right….it’s already happening.


  10. Steve Barry commented on Apr 22


    Today will assuredly mark the 23rd consecutive trading day since the March lows that QQQQ volume could not reach its 100 day MA. This stat absolutely astounds me and I would bet that very few times in history, if any, has such a streak occurred (I check back 4 years and saw none). This rally is a Wall Street special…a head fake designed to create bagholders. All major QQQQ names have very low short interest…no squeeze is possible.

  11. J. BridgesJ commented on Apr 22


    Thanks for adding a little statistical significance to my bluster. I find the lack of volume rather encouraging as well, and have used the recent big up days to add to hedges for some accounts.

    Here come to buy programs, let’s see if they stick…or get faded.

  12. AJF commented on Apr 22

    To the above post regarding realtors not including “low” sales in the figures in the Sarasota, FL region; I can prove that the local realtor association for the Sarasota-Bradenton-Venice MSA has been falsifying data and misrepresenting data since ’06, I have contacted a few people, but no one has shown any keen interest in analyzing my claims-almost as if we are to assume that any realtor data is erroneous to begin with . . . as well, the Sarasota Herald Tribune has serious errors in its reporting of real estate transactions, i.e. reporting the same sale over and over again over a period of almost six months, thus artificially boosting sales, I have brought this to numerous editors at the Trib, but I cannot elicit a response from any of them. BTW, a quick question: Is NOW the time to buy?

  13. michael schumacher commented on Apr 22


    you present all that anecdotal info. about how sales are manipulated and then you ask if it is time to buy????


    I am just as floored as you re: volumes, the old axiom “markets are bigger than manipulation” is getting a severe test. I think that retail clocked out months ago based on this BS tug’o’war and that is one of reasons we see low volume however it plays right into the hands of those doing the buys…wait until summer…..I’m so not looking forward to the next “it’s all contained”…..


  14. AGG commented on Apr 22

    In financial markets, all men are not created equal

    Realize that at the highest levels, the true story of money is dirty. Think about it. When Bear Stearns, one of the top five-brokerage houses in the US, collapsed recently, did people start scrambling to get out of their buy-and-hold strategies? Did they start to ask a lot of tough questions? No. Why? JP Morgan, a firm with a long history of “rescuing” other banks, was going to bail Bear out.

    Never mind the meetings with Treasury officials over the previous weekend to talk about things too sophisticated for the masses to understand anyway. All we know is that JP Morgan initially announced that they would only have to spend $236 million to buy out the entire brokerage house. Of course, the Federal Reserve loaned JP Morgan $30 billion to “stabilize” the situation. Did most investors understand that in so doing, we were ultimately paying for the deal through a decrease in the value of the US dollars currently in our pockets? When average Americans fall behind on their debts, banks begin charging us 31 percent, and we are hounded by bill collectors. When major banks fall behind and lose billions, the banking cartel creates money out of thin air and gives new loans at 2.25 percent to its favored members. Does this sound sustainable to you? Does it build confidence in the system?
    Doug Wakefield of Best Minds, Inc.

    Unless JPM and other money center brokerages start buying thousands of houses, the bear market in housing has just begun.
    1) Wages are required in order to have buying power.
    2) A job is required in order to have wages.
    3) No money, no house.
    This isn’t complicated.

  15. DonKei commented on Apr 22

    AJF re fraud in the numbers:

    Remember that all local newspapers get a ginormous amount of their revenue from the local real estate market. They’ll always downplay the bad, and trumpet the good, so far as news/sales, etc. are regarding the local market. In many respects, a hometown paper might as well be a publication of the local realtors and homebuilder’s association. And don’t ever trust a salesman. Even if it’s your mother.

    OT prediction:

    Bear Stearns got the ball rolling in Feb of 2007 when they revealed that they were ‘er, a little short of cash in a couple of hedge funds. It took until August ’07 before the severity of the problems began to sink in and CHL was rescued by BoA. It still took until Oct of ’07 ’til the stock markets finally decided this financial/real estate thingy might just affect the real world.

    Bear’s collapse in March of this year awakened the world to the tenor of the problems. The fed’s rescue did nothing but temporarily forestall the severity of the contraction that’s about to ensue. Figure about October of 2008 for the shit to really hit the fan again. In the meantime, enjoy a sucker’s rally in everything at once, even oil.

  16. AJF commented on Apr 22

    Schumacher: Sarcasm is not a lost art.

  17. Vermont Trader commented on Apr 22

    So who’s looking forward to ABK tomorrow?

    An insurance co. that’s writing no new business. They only lost $35.00 last quarter. Have they reserved enough or have things gotten worse? Will they keep AAA tomorrow?

    Funny how nobody talks about the monolines anymore. Nothing to see here, move along please.

  18. Space Cowboy commented on Apr 22

    Re: AJF (…Is NOW the time to buy?)

    Act I

    April 21, 2008, 11:51 am
    Delinquencies Rise on Home Equity Lines of Credit
    Standard & Poor’s said delinquencies on home-equity lines of credit issued in 2005 and 2006 shot up in March, underscoring continued trouble in the U.S. economy.

    S&P said that 9.19% of lines issued in 2005 and 11.45% of loans issued in 2006 are delinquent, up 6.49% and 6.51% from February. Serious delinquencies, where lines are 90-days plus overdue or in foreclosure, shot up 8.83% and 8.75% for 2005 and 2006, respectively, representing 5.3% and 6.34% of the years’ total issuance.

    The lines S&P tracks were sold to investors as residential mortgage-backed securities. Their declines have fueled the current credit crisis.

    Delinquencies on lines issued in 2007, which have the worst record of cumulative losses in the credit crisis so far, fell 9.06% to 4.72% of the aggregate. S&P said 3.5% of year-old lines issued in 2007 have been booked as losses – more than three times the rate for year-old 2006 lines. Seriously delinquent 2007 lines were flat at 2.64%.

    During the heady days of the housing market run up, home-owners took cash out of their houses in the form of higher mortgages – under the assumption that values would continue to rise. Now that housing prices in the U.S. are falling, many people have seen that value of their home fall below what they owe, and some have been forced to simply walk away from their homes. –Andrew Edwards

    Permalink | Trackback URL: http://blogs.wsj.com/economics/2008/04/21/delinquencies-rise-on-home-equity-lines-of-credit/?mod=WSJBlog/trackback/

    Act II

    Here Comes the Next Mortgage Crisis
    Subprime was just the beginning. Wait until California’s prime borrowers start handing their keys to the bank.
    By Mark Gimein
    Posted Tuesday, April 15, 2008, at 8:12 AM ET

    California is to mortgage lending what Chicago is to pork bellies. For years, that meant it was a place with soaring house values; today, the foreclosure rate across the state is twice the national average and going up fast. Riverside County, outside Los Angeles, may be the foreclosure capital of the country, with a rate close to six times the national average. And housing prices are in freefall……(cont)


    Act III The s#hit has yet to be indexed (ie hit the fan) and will reach zenith (maxium chaos) in about 12-18 months) w/out some form of ‘Marshall plan’ to rescue the lenders (uh, investors) from the cram-down.

    As always, your mileage may vary….

  19. Space Cowboy commented on Apr 22

    Addendum to Space Cowboy post…

    Paid off my mortage a few months ago (Wells held the paper) and talked with one of their mortage bankers. Sharp Lady!

    Comparing notes on RE/mortage porfolio/Creative accounting holdings, I asked how much toxic paper Wells was carrying. ‘Not much’ was her response ‘except for a few groups of WaMu orignated loans that Wells bought….that was defaulting at 92%’. Yep, you read that right!

    Stunned was my only response!

  20. drey commented on Apr 22

    Seems that the housing inventory numbers, no matter how accurately they’re calculated, will severely underestimate the amount the amount of ‘stealth’ inventory out there which is to say sellers who want out but are waiting for a healthier market before listing their properties…

    I’ve personally got two rental properties which would fall into this category.

  21. Space Cowboy commented on Apr 23

    Addendum to Act III

    So… what about the entities/institutions that hold the paper? Who takes the cram-down?

    Shiller: Housing slump may exceed Depression
    Bailouts will be needed so millions don’t lose homes, top economist says…(cont)


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