Sales of both new and existing homes did the cliff dive in November. Prices fell, as credit was hardly available for anyone but the best qualified buyers.
Here are the specifics:
• National median existing-home price fell 13.2% from November 2007; This was the most on record (since 1968) ; In the West, (think California, Nevada and Arizona) prices tumbled 25.5%;
• Existing home sales were down 10.6% from November 2007, and off 8.6% from October 2008 (October sales were also revised downwards); Single family sales fell to the lowest since ’97.
• Sales were for 4.49 million annualized — about 440k less than expected; This is the lowest level since the 1999, when the NAR added in Condos and Coops;
• Mortgage rates are the lowest in three years, the problem is more along the lines of credit availability.
• Existing home supply rose to 11.2 months versus 10.3 in October; (Existing Home sales are about 85% of all sales;)
• New Home Sales fell 35.3% below November 2007; (Monthly sales change of 2.9%, ±13.9%, were not statistically significant).
• Sales for November were the lowest since January 1991;
• This was the 4th month in a row New Home Sales have fallen;
• New Home Inventory represents a supply of 11.5 months at the current sales rate.>
I find the monthly spin from the NAR laughable. They attribute November’s results to a “weak stock market, job losses and low consumer confidence.” They never seem to recall that Real Estate prices remain too high relative to incomes and rental prices. This is the hangover from the credit bubble.
Not incidental to all this is the role some of the NAR’s membership played in this. The organization is not blameless in the boom and bust of home prices. Far too many Real Estate agents, either wittingly or unwittingly, helped along a massive fraud. They steered buyers to corrupt mortgage brokers and/or criminal appraisers, who knowingly inflated appraisal prices so as to get more referrals.
The NAR failed miserably at policing their own members. Question: Do they even have a division that does this? Do they teach ethics to their members? Other than running a horrific ad campaign that advised people that its always a great time to buy a house (just before a 25% drop), and spinning the monthly data, WTF do these people actually do?
via Calculated Risk
Existing-Home Sales Decline in Economic Uncertainty
National Association of Realtors, December 23, 2008
NEW RESIDENTIAL SALES IN NOVEMBER 2008
The Census Bureau December 23, 2008
It’s a great time to buy or sell a home! (November 3 2006)
Analyzing why “It’s a great time to buy or sell a home!” (November 4, 2006)