Keep in mind that today’s results reflect pending sales that largely preceded the significant economic shocks that have continued through November and December and that, as has been widely reported, many regions are now experiencing significant falloff in demand for residential real estate.
Also, notice that sales in the West region have deteriorated significantly since September falling 8.7% on a month-to-month basis likely as a result of investors pulling back on purchases of foreclosed homes as it has become increasingly obvious that a bottom has not yet been reached in those markets and that prices are, in fact, headed lower.
As usual, NAR Senior Economist Laurence Yun continues his self-interested spin invoking the old 2006 lines of “stabilization” and “narrow range”.
“Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,”
The following chart shows the national pending homes sales index since 2005 compared monthly. Notice that each year, the months value is decreasing fairly consistently (click for larger version).
The following chart shows the national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).
Note that in the above charts, I had to use the Not Seasonally Adjusted (NSA) data series as NAR changed the methodology for their Seasonally Adjusted (SA) series a while back and never republished the numbers.
Look at October’s seasonally adjusted pending home sales results and draw your own conclusion:
- Nationally the index declined 1.0% as compared to October 2007.
- The Northeast region declined 14.1% as compared to October 2007.
- The Midwest region declined 6.8% as compared to October 2007.
- The South region declined 2.9% as compared to October 2007.
- The West region was up 17.4% as compared to October 2007.