Existing Home Sales Index fell 6.8% from July 2007 last year, an improvement from the prior month’s 12.3% year over year fall. Surprisingly, month over month index fell 3.2%, despite the usual seasonal boost seen in July.
Sales should continue slide on a monthly basis, until we hit a low for the year in January.
The NAR remains compulsive spinners, and they refuse to let the data speak for itself. Consider the laughable inanities from their news release, along with my translation:
"Near-Term Home Sales to Stay in Narrow Range"
Of course, the exact same numbers with a positive sign in front of them are not a narrow range, they are a sign of a bottom and imminent recovery.
“Pending home sales are oscillating month-to-month, with the long-term trend essentially flat."
An index down 20 of the past 30 monthly data points hardly qualifies as flat"Contract signings have been steaming ahead, nearly doubling in activity from a year before in several California and Florida markets"
Something is steaming, but its not contract signings; The doubling has only occurred in regions where prices have dropped significantly, in many areas by as much as 40%;
The NAR are still forecasting home sales to
rise by 6.9% in 2009, and prices to rise by 2 to 4%. Why? Because they just cannot help themselves.
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Previously:
Who Doesn’t Understand the Pending Home Sales Index? August 08, 2008
http://bigpicture.typepad.com/comments/2008/08/pending-home-sa.html
Source:
Near-Term Home Sales to Stay in Narrow Range
NAR, September 09, 2008
http://www.realtor.org/press_room/news_releases/2008/home_sales_in_narrow_range
“Yun also says that stringent lending criteria by Fannie Mae and Freddie Mac — the mortgage finance companies taken over by the government this weekend held back sales activity.”
That’s the bigger issue. With all due respect to Bill Gross, it doesn’t matter all that much if mortgage rate come down a little if people still can’t qualify for the loans.
Affordability is still very low and will only improve with lower house prices.
Consistant sale numbers does not constitute a bottom nor a recovery. Only after the REO’s are absorbed will organic sales begin. Of those, only homeowners who purchased either in the 1990’s and did not extract their equity, or any seller who put cash down will be able to sell. Price suppression will be en vogue through 2011 with appreciation only possible with increased income to support the full doc, principal and interest mortgages funding now a days. A South Orange County California perspective.
I agree with Steve in Fly-over land. Not until you see a healthy return of well paid jobs will you see a turn around for real estate. Part of the problem is that many of the high paying jobs in California were real estate related. Practically any lame loan executive could pull down $10,000 a month. So if you think of it, with hundreds of lenders closing their doors and thousands of loan executives out doing something else, being paid much less, who has the money to put 10% or more down on a home purchase? Its my understanding that every job you forfeit impacts 9 others. With so many top end earners gone, we’ve just started to see the impact shake through the California economy. Low interest rates will help of course, but don’t expect the same impact liar loans had on the market. Those days are gone, everyone needs to move on.
NAR is a trade association, they are lobbyists paid to protect the interests of and to spin positively in favor of their membership. You wouldn’t expect the National Cattlemen’s Beef Association to give you the facts regarding mad cow disease would you?
Then what ? Start of new year then lower ?
“Sales should continue slide on a monthly basis, until we hit a low for the year in January.”
The other thing I can’t wrap my head around is all this talk of how things will be in 2009. Everyone says things will be rosier in 2009. Why? What is the catalyst? It’s not going to happen in 2009. Anyone who says so should be asked the “How?” question, or discounted as fraud.
As long as the NAR continues its positive spin, we can be assured the bottom is not in yet. When they start becoming negative…OK I may be pushing it…when they start being realistic, then and only then might we be reaching the bottom.
LOL Maggie, as one can only conclude we are suffering mad real estate disease.
I’ve tried to paint an objective picture of the pending home sales index in the URL below. Seems to me that the best way to track pending home sales is to use the non-seasonally adjusted number.
http://trendingrealestate.typepad.com/trendingrealestate/2008/09/a-historical-review-of-nar-pending-home-sales.html