Pending Home Sales: October 2009

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for October showing a whopping 31.8% year-over-year increase in pending home sales nationally coming largely as a result of the governments historic housing tax gimmick.

Meanwhile, the NARs chief economist Lawrence Yun spins the concept that “pent-up” demand coming from “financially qualified renters“ is being unleashed on the nation’s housing markets by the governments housing tax carrot…

“Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus, … This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”

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).

Look at the seasonally adjusted pending home sales results:

• Nationally the index increased 31.8% as compared to October 2008.
• The Northeast region increased 44.2% as compared to October 2008.
• The Midwest region increased 36.6% as compared to October 2008.
• The South region increased 31.6% as compared to October 2008.
• The West region increased 21.9% as compared to October 2008.

Crashachusetts Existing Home Sales and Prices: October 2009

This week, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for October showing that single family homes sales surged 17.7% on a year-over-year basis while condo sales also jumped 17.2% over the same period.

Single family median home value declined 2.6% on a year-over-year basis to $287,000 while condo median prices declined 4.0% to $240,000.

Although these results will likely be touted by MAR and the Boston Globe (… both with significant interest in promoting “good news” for housing) as an indication that the housing market has rebounded, it’s important to note that without the propping of the governments “homebuyer” tax gimmick these results would be significantly weaker.

Sales have surged as “buyers” leapt for their $8000 tax carrot but in all likelihood the simulative effects have merely shifted demand forward in time, stealing sales from the rest of this year and on into next.

Now that the feds have even stepped up their support of unaffordable housing by broadening the hosing tax gimmick to cover “move-up” buyers with higher income requirements, it will be interesting to see the effects on our housing market.

This sham government stimulation is poorly targeted and absurdly expensive but is it possible that it may soon become ineffective?.. only time will tell.

Of course, you know where the Massachusetts Association of Realtor president Gary Rogers stands on government handouts and trickery… he applauds it all the while lining his and his fellow “brokers on commission” pockets with your tax dollars:

“It is apparent from this significant jump in home sales in October, which is the biggest year-over-year gain we’ve seen since November 2004, that buyers were making sure to take advantage of the tax credit prior to its deadline, … Now that the President has extended and expanded the credit, we should see continued improvement in the market through the winter and into the spring.”


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 home price movement.

Key Statistics from the Report:

Single Family results compared to October 2008

• Sales: increased 17.7%
• Median Selling Price: declined 2.6%
• Inventory: declined 15%
• Current Months Supply: 7.1
• Current Days on Market: 126

Condo results compared to October 2008

• Sales: increased 17.2%
• Median Selling Price: decreased 4.0%
• Inventory: declined 16%
• Current Months supply: 7.3
• Current Days on Market: 137

Housing Starts Down 10.6% Month on Month - Nuff Said!

The government sponsored housing bounce is dead... more on the new residential construction numbers later....