Tuesday, November 28, 2006

Pinocchio-Economics

The Massachusetts Association of Realtors (MAR) coverage of this historic housing decline is starting to become truly revolting.

At least the National Association of Realtors (NAR) can hide behind nationalized numbers while attempting to spin a feeble “market stabilization” picture.

MAR’s effort to twist some of the country’s worst regional housing numbers into a positive light will hopefully disclose their self serving interests and further discredit an institution that has long since lost touch with reality.

Here are some truly baseless quotes from MAR President David Wluka published in Tuesday's home sales press release:

“It appears as though the market correction may be about over,” said Wluka going on to suggest that “Prices have stabilized in the single-family market and probably aren’t far from bottom for condos. For any one who has been attempting to time the market, this wouldn’t be a bad time to jump in before mortgage rates start inching up or supply levels begin to drop.”

Unfortunately for Wluka though, the downturn is NOT stabilizing and In fact, this October showed the lowest volume of single family homes sold for any October since 1994.

To put things in a little better perspective, 1994 squarely predates the current housing bubble that really started inflating in 1997. So, if home sale volume is starting to retrace to pre-bubble levels, it’s difficult to understand how an honest assessment could yield “market stabilization”.

As with last month, its important to note that the impact of the housing slowdown has been so significant that Massachusetts is now poised for the greatest yearly sales drop of single family homes in at least the 17 years that sales have been charted.

Today’s 16.52% sales drop brings the current year’s total of single family home sales to only 35,293, well below the 41,672 total for the first 10 months 2005.

Review the following chart:



As you can see, Massachusetts is headed for roughly 41,743 total single family home sales for 2006 and that’s with a fairly optimistic projection of only a 10% sales decline for the months of November and December.

The following chart demonstrates what this drop off would look like in the context of single family home sales since 1990. Click on it for a larger, more readable version.


As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

Key Statistics for October 2006

  • Single Family Sales down 16.52% as compared to October 2005
  • Single Family Median Price down 2.0% as compared to October 2005
  • Condo Sales down 17.6% as compared to October 2005
  • Condo Median Price down 3.7% as compared to October 2005
  • Inventory of single family homes have risen for 20 consecutive months and now stands at 40,254 units listed on the market through MLS. This represents 12.4 months of supply.
  • Single Family average “Days on Market” stands at 126 days in October as compared to 113 days for October 2005
  • Condo average “Days on Market” stands at 143 days in October as compared to 99 days for October 2005

Key Facts

  • September marks the Seventh (MAR), (Tenth per The Warren Group) consecutive month of declining sales.
  • Boston leads the nation in price reductions with 46.4% of homes listed on the MLS having been reduced.

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