Thursday, December 28, 2006

Slapping Lipstick on the Pig

Today, the National Association of Realtors released its monthly “Existing Home Sales” report for November along with a stepped-up attempt to spin a “market bottom” message.

As David Lereah puts it:

“It looks like we may have reached the low point for the current cycle in September… We’ve entered a more sustainable period of home sales now…”

Furthermore, Lereah has concocted a sketchy estimate of price declines effect on buyers by adding:

“For every 1 percent drop in home prices, we project an additional 50,000 buyers are drawn into the market,”

Unfortunately, there’s no information disclosing how Lereah has calculated this projection but its presence seems to be attempt to not only spin a positive message from the current and impending price slide but also to remind buyers that they should consider jumping in before a possible rush.

Additionally, NAR President Pat Vredevoogd Combs added:

“…it’s the first time since August of 2005 that interest rates are lower than a year earlier… This is increasing buying power at the same time that sellers are showing a willingness to negotiate price and terms. Combined with a plentiful supply of homes on the market, there’s a window for buyers now with conditions that we haven’t seen prior to the beginning of the housing boom in 2001.”

In reality though, November not only marked the eighth straight month of sales declines but also one of the greatest drops to median home prices on record easily beating a prior record set in September as well as just falling short of the GREATEST SINGLE MONTH DROP TO MEDIAN PRICES SET IN OCTOBER.

Additionally, with the exception of median condo prices for the Northeast and the Midwest regions, EVERY price and sales indicator was DOWN and EVERY inventory and supply indicator was UP, presenting further evidence that the housing market is declining dramatically and thoroughly across every region of the US.

There should be little doubt now that the housing market is experiencing a significant correction even when looking at a national scope.

The following shows the data form all the NAR reports released today consolidated into one view:

National Statistics (Year-Over-Year as compared to November 2005)

  • Median price of all existing homes declined by 3.1%
  • Median price of existing single family homes declined by 3.6%
  • Median price of existing condos went unchanged.
  • Sales of all existing homes (single family, condo, etc.) declined 10.7%
  • Sales of existing single family homes declined 10.2%
  • Sales of existing condos declined 13.6%
  • Inventory for all existing homes increased 30.6% to 3,820,000
  • Inventory for single family homes increased 29.6% to 3,240,000
  • Inventory for condos increased 36.8% to 580,000
  • The number of months supply for all existing homes increased by 46.0% to 7.3 months.
  • The number of months supply for all existing single family homes increased by 42.9% to 7.0 months.
  • The number of months supply for all existing condos increased by 58.6% to 9.2 months.

Regional Statistics (Year-Over-Year as compared to November 2005)

Northeast

  • Median price of all existing homes declined by 2.2%
  • Median price of single family homes declined by 4.5%
  • Median price of condos increased 2.3%
  • Sales of existing single family homes declined 2.5%
  • Sales of existing condos declined 8.7%

West

  • Median price of all existing homes declined by 0.8%
  • Median price of single family homes declined by 0.1%
  • Median price of condos declined 7.9%
  • Sales of existing single family homes declined 17.1%
  • Sales of existing condos declined 16.9%

South

  • Median price of all existing homes declined by 2.9%
  • Median price of single family homes declined by 6.7%
  • Median price of condos declined 5.1%
  • Sales of existing single family homes declined 9.2%
  • Sales of existing condos declined 18.9%
Midwest

  • Median price of all existing homes declined by 4.6%
  • Median price of single family homes declined by 2.2%
  • Median price of condos increased 6.0%
  • Sales of existing single family homes declined 9.4%
  • Sales of existing condos declined 12.4%

Posted by at