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Prices Fall, Inventories Rise, NAR Spins

Posted By Barry Ritholtz On November 28, 2007 @ 10:50 am In Credit,Data Analysis,Psychology,Real Estate | Comments Disabled

Ushmsales112807 [1]Sales of existing homes fell to a record low in October. What was the largest drop in home prices — ever
– wasn’t enough to revive sales.

Inventory levels also climbed to record highs.

The data [2] highlights:

• The national median existing-home price (All housing types) was
$207,800 in October — down 5.1% year over year (October 2006 = $218,900)

• Total housing inventory rose 1.9% to
4.45 million existing homes. This represents a
10.8-month supply. Inventory rose 1.9% for the month.

• Single-family home sales were down an astonishing 20.8% from October 2006.

• The median
existing single-family home price was $205,700 in October, down 6.3%
from a year ago.

• Existing condominium and co-op sales fell 20.2 % percent from October 2006; they are off 9.1% from last month. 

• The median existing condo price was $223,500 up 4.9% percent from a year ago.

Housesupply_2 [3]

Chart courtesy of NAR, Lehman Brothers via Real Time Economics [4]

>

Of course, the biggest laugh was the National Association of Realtors headline: Mixed Results For October Existing-Home Sales; Mortgages Improving [2]. 

If by mixed you mean a combination of terrible and horrible, then I guess its mixed.

Rex Nutting [5] pulled this gem of a quote:

The fundamentals of the market don’t support a further
decline in sales, said Lawrence Yun, chief economist for the NAR, who
said low mortgage rates and job growth should keep sales from falling.
While the subprime mortgage market has disappeared, the Federal Housing
Administration is picking up its lending.

"I don’t anticipate any
further major sales declines," Yun said. If sales do continue to fall,
"it would be a major concern" and "would raise the risk of an economic
recession."

Its worth reminding readers that Yun (nor his predecessor, the oft-hallucinatory David Lereah), have never in the past anticipated any sales decline.

If they were completely honest about this failure of expectations (rather than shilling for a clown outfit) the monthly commentary would read: "Geez, sales fell again? Wow, we didn’t see THAT coming. No worries, next month should be fine . . ." >

Source:

Mixed Results For October Existing-Home Sales; Mortgages Improving [2]
NAR, November 28, 2007
http://www.realtor.org/press_room/news_releases/2007/ehs_oct07_mixed_results.html

Supply of homes on market at 22-year high [5]
Rex Nutting
MarketWatch, Last Update: 10:14 AM ET Nov 28, 2007
http://tinyurl.com/32coee

See also:
Study Warns of Decline In Value of Homes [6]
DAMIAN PALETTA
WSJ, November 27, 2007 5:57 a.m.
http://online.wsj.com/article/SB119615781800405134.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2007/11/prices-fall-inventories-rise-nar-spins/

URLs in this post:

[1] Image: http://news.google.com/news/url?sa=t&ct=us/5-0&fp=474d6ef24a888b69&ei=wZFNR8GpCYrcygS0iITwCw&url=http%3A//www.rttnews.com/FOREX/FXTopStory.asp%3Fdate%3D11/28/2007%26item%3D10&cid=1124217989&sig2=IhtSGxQQsFq4bG0yYEnZgA

[2] data: http://www.realtor.org/press_room/news_releases/2007/ehs_oct07_mixed_results.html

[3] Image: http://bigpicture.typepad.com/photos/uncategorized/2007/11/28/housesupply_2.jpg

[4] Real Time Economics: http://blogs.wsj.com/economics/2007/11/28/housing-wheres-the-bottom/

[5] Rex Nutting: http://www.marketwatch.com/news/story/supply-homes-market-22-year-high/story.aspx?guid=%7B6774FAFE%2DFDF6%2D4C70%2DB1D0%2D55A7709ED89E%7D

[6] Study Warns of Decline In Value of Homes: http://online.wsj.com/article/SB119615781800405134.html

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