Existing Home Sales fell 5.4% last month, despite the nonsense you have read elsewhere.

NAR continues to bullshit America with their garbage data and spin, month after month, with few people calling them on it. Well, I’ve had it up to here with their garbage:.

Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors

No, home sales did not rebound — that was purely the result of SEASONAL ADJUSTMENTS

As you can see on the NON SEASONALLY adjusted chart below, from August to September (Red Bar) Sales actually dropped. In prior years — 2005, 2006, 2007, and 2008 — there was always a big fall from August to September.

This year, the fall was more modest.

Why was this year so different? We have ZIRP (which will eventually go up) and a large 1st time buyers tax credit that is scheduled to expire.  Hence, the unusual September activity that dos not reflect the traditional drop off.

Mark Hanson notes that on a NSA basis, Existing Home Sales actually dropped 5.2% — this was the second straight monthly drop on an NSA basis.

Mark adds:

The NAR’s attempt to annualize seasonality never before seen has resulted in a headline very far off base . . . The fact is, Sept NSA sales were above last year’s 438k but below last month’s 498k coming in at 472k as shown below. In addition, sales prices fell. This pulled-forward demand sets up the slow season to be one of the slowest on record.

The tax credit effectively extended the purchase season which is why sales were even this strong. But when you consider the hundreds of billions spent to prop up the housing market, which only resulted in 34k additional sales over last September (one of the worst years on record for housing) and fewer sales YoY in CA, sales were really not that great. When organic sales go away suddenly for the season, which will happen in the near-term whether the tax credit is extended or not, it sets sales and prices up for the largest swings lower we have seen since all this began two years ago.

That’s precisely correct — the usual selling season was extended due to the tax credit.


click for larger chart


courtesy of calculated risk


NSA home sales


I am honestly unsure of whether the folks at the NAR are dumb as lawn furniture and make these misrepresentations honestly — or whether are just another group of disgusting spin doctors, willfully peddling lies because it helps their own agenda.

Those are pretty much the only options: Idiots or full of shit.  (You decide).


Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum
October 23, 2009


Category: Data Analysis, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

49 Responses to “Existing Home Sales FALL in September 2009”

  1. Mannwich says:

    But the media plays right along. Hey Barry – is “Ecisting” a new category of home sales? ;-)


    BR: Fixed!

  2. Bruce in Tn says:

    “I am honestly unsure of whether the folks at the NAR are dumb as lawn furniture and make these misreperesntations honestly — or whether are justa nother group of disgusting spin doctors, willfuylly peddling lies because it helps their own agenda.”

    …No you’re not….

  3. rootless_cosmopolitan says:

    NAR has a special interest and their spin looks accordingly.

    Selling homes doesn’t create any value in the economy. But it increases GDP, doesn’t it?


  4. HarryWanger says:

    Answer: The NAR are not dumb as lawn furniture but are firmly in the camp of “disgusting spin doctors”. Really, what can we expect them to say? “Shit, homes sales fell again!”? No way, they have to keep the “excitement” going since we all know “happiness generates happiness”.

    It’s like asking the NAHB what they think about new construction. Of course they can’t tell you it’s getting really ugly again, it’s not in their best interest. So they tell you it slightly improved or was off just a little bit. But the media takes this inside slanted poll as if it were handed down to Moses monthly.

  5. Bigfly says:

    Let me spin this a bit differently. Yes, housing is down on a sequential basis, however if you look at housing vs. a year ago, starting in June – existing home sales are better than the prior year – and in September, better than the prior two years.

    While the level is still poor – we are BEGINNING (with an indetermined length!) to see better comparisons, much in the same way we would look at earnings – better on a y/y basis.

    I’m not rushing to say the housing debacle is over, but pointing out that we need to begin looking not at the sequential series – but the y/y comparison.

  6. Marcus Aurelius says:

    Buy now, or be priced out forever.

  7. beaufou says:


    I think you should re-read this part before making y/y comparisons.

    “But when you consider the hundreds of billions spent to prop up the housing market, which only resulted in 34k additional sales over last September (one of the worst years on record for housing) and fewer sales YoY in CA, sales were really not that great.”

  8. HarryWanger says:

    Bigfly: You are correct in the observation of YOY comparisons but that really only started happening in June this year. Wonder why? Well, first time credit, low mortgage rates, relatively cheap houses, forced sales, foreclosures, etc. That’s why you’re seeing better comps. The credit goes away, rates go up, those comps go away with it.

  9. rootless_cosmopolitan says:

    Since we are talking data, Calculated Risk shows the latest Philly Fed State Coincident Indicators:


    It shows a decline of economic activity for 41 states, and a increase for only six states during the third quarter, and a decrease in 39 states and increase in 9 states during September. An economic mini boom, indeed.

    Isn’t the economy supposed to have come out of recession in the third quarter, w/ expected GDP growth of 3.1% at a seasonally adjusted annual rate?


    Something doesn’t add up here.


  10. DeDude says:

    To make the message that sales fall 5.2% (when such a fall is just natural seasonal variation) would be almost as NAR’ish as to call a “Big rebound” in seasonally adjusted sales. The big news is that we have 4 months in a row with small Y-O-Y increases in sales. The big question is how much of that is the result of the credit. I don’t think the free fall in sales will resume (because prices continued to fall and there is heavy investor interest in the low end). However, we may have a hard time getting a positive Y-O-Y number next month.

  11. Bigfly says:

    To beaufou:

    No argument – I’m VERY interested in seeing what home sales look like w/o the assistance (I’m guessing that it will look like auto sales after cash for clunkers). IF legislation does not extend the home purchase “bonus” – sales readings for Nov and Dec will be ones to watch.

    My point was agreeing w/ the NAR bashing, but to look at the numbers as they are reported and try to see some trends – obviously the governments fingers are messing up a clean/clear comparison.

  12. call me ahab says:

    “NAR . . .dumb as lawn furniture”

    damn BR- what did lawn furniture ever do to you-


  13. this: “are justa nother group of disgusting spin doctors, willfully peddling lies because it helps their own agenda.” works so much better, because it’s, waay truer, than, just, FOS..

    Cast my Ballot in that direction.

    though, as Ahab points out, “dumb as lawn furniture”, BR, watch out for PETLF, that Group knows no bounds..

  14. Space_Cowboy_NW says:

    “Those are pretty much the only options: Idiots or full of shit. (You decide).”

    Alternate (out?) take: Cranial Rectal Inversion Challenged = CRIC

    As always, your mileage may vary………

  15. bsneath says:

    Good observations BR. When you have a tax credit that is about to expire creating last minute demand and a seasonally low month for home sales, you get an artificially overstated seasonally adjusted number. The tax credit induced sales are magnified.

    So what do you suppose the seasonally adjusted numbers will be for Oct/Nov without tax credits and on the other side of the “brought forward” demand? Probably pretty ugly.

  16. DeDude says:

    The Brokings Institute report previously cited by Barry suggested 350K of additional sales from the credit. My guess it to distribute those extra sales over June, July, August, September and October with additions of 50K, 60K, 80K, 100K and 30K respectively for existing homes and a total of 30K for new homes for the whole period (new are only about 10% of existing). If you subtract that from the chart then you can get an idea of where things would have been and are going, without the credit. My guess is 370K for October, 330K for November and 310K for December.

  17. vine2wine says:

    Referencing a BR blog from….wow 3 years ago. NAR v Reality….too funny. Better buy now, never a better time! Land is scarce….


  18. franklin411 says:

    Yesterday Barry said the home buyer’s credit was irrelevant, yet today he’s saying it extended the home buying season? So which is it, Barry? More importantly, what will you think about it tomorrow? I’d like to get a head start.


    BR: I didn’t say it was irrelevant, I said it was absurd to spend $43,000 per additional home sale fora $8,000 credit, and $292,000 per $15,000 tax credit.

  19. leftback says:

    Barry will think it was a bloody stupid idea tomorrow, franklin… just like today. Best way to stimulate housing sales? Try lower prices…. you wait until we get higher mortgage rates, franky boy… the NAR will be like a graveyard this winter.

  20. wunsacon says:

    >> Yesterday Barry said the home buyer’s credit was irrelevant,

    F411, maybe I’m blind. But, I’d be shocked if Barry said that. And skimming yesterday’s posts, I still don’t see where Barry said that.

    “Irrelevant” short-term or long-term?

  21. wunsacon says:

    To clarify, I’d be shocked if Barry said it was irrelevant *in the short-term*.

  22. rob says:

    Hey Barry, since you seem to get a chubby on the annotated charts. Get you a Wacom tablet that will let you dress up your charts (pics, etc) quickly and in hand writing. You’ll love it. http://www.wacom.com/index2.php

  23. rex says:

    Home sales are extremely seasonal. That’s why the reported sales figures are seasonally adjusted, so we can hope to distinguish between the usual seasonal variation (which is boring and meaningless) and what’s happening to the fundamentals (which is what matters to anyone trying to figure out where we’ve been and where we are going).

    If you have a beef about HOW they did the seasonal adjustment, I’m listening. But to complain that they DID adjust them is just wrong.

    Sales almost always plunge in September, but this year’s decline was far less than in most years.
    Here’ s the NSA data for single-family homes for the past 10 Septembers:
    1999: -19%
    2000 -17.7%
    2001 -26%
    2002 -17.1%
    2003 -12.5%
    2004 -15.5%
    2005 -15.2%
    2006 -19.2
    2007 -28.9%
    2008 -10%
    2009 -5.3%.

    In fact, the 5.3% decline in NSA sales is the lowest drop in September since sales rose 2.7% in Sept. 1980.

    If you think existing home sales fell 5.4% in September, then I guess you also think nonfarm payrolls rose 303,000 in September (after falling 1.5 million in July).

    If you’re going to use NSA numbers, then you should be consistent.


    BR: Understand the impact that prior years have on making Seasonal statistical changes.

    When you do seasonal adjustments, there is a presumption that the annual changes happen around the same time each year and at approximately the same magnitude during that time period.

    As the data you referenced showed, the prior time periods of the past 10 years were large double digit falls — were significant drops 10%-29%. That data goes in to the seasonal adjustments.

    This year, due to ZIRP/Tax credit, the drop was minor –much smaller than usual. But the seasonal adjustment does not know that and it PRESUMES THE AUGUST/SEPTEMBER DECLINE IS TYPICAL OF THE PRIOR 10 YEARS. That creates the false appearance of a surge when seasonally adjusted.

    Hence, any decent statistician who worked on these numbers knew that the seasonal adjustment was going to create a misleading number, based on the historical data.


  24. rcogen says:

    Rex beat me to larger point, so I’ll just say the NAR can’t win with you can they?


    Is the problem that the NAR ignores seasonality only half the year?


    BR: See my answer to Rex

  25. GB says:

    I bet the decade over decade change is way up! They should have reported that…

  26. Mark Hanson says:

    -Month’s Supply Dropping Does Not Mean What it Used To

    Inventories — month’s supply — declined for three reasons none of which mean what they have in the past

    1) HAMP keeping foreclosure inventory off the off of the market while foreclosures remain in hot demand. The amount of foreclosure-ready inventory in the foreclosure pipeline has never been greater and much of this will end up as listed MLS supply. However, at the time it is jammed up due to HAMP. This is a sad unintended consequence of mortgage mod initiatives and foreclosure moratoriums. Obviously, there is demand at the low end and HAMP has kept bad owners in houses and real buyers who can afford them, away.

    2) Seasonality – many just can’t or won’t sell during the school season so they let their listings expire in September and relist the next year. This is why inventory fell 7.5% MoM. Over the next couple of months when sales fall sharply and inventory remains flattish — which is usual from Sept to Oct — then month’s supply will jump back up as sharply as it dropped.

    3) Epidemic Negative Equity combined with tougher financing keeping 10s of millions from selling and re-buying. In past years, everyone could sell and re-buy even if they had no equity in the house due to exotic finance. Now, you must have at least 10% to pay a Realtor and put a small down payment on an FHA loan. Mid-to-high end buyers must have 20% to 26% equity because of the larger down payments required. In the harder hit states, this takes the majority out of the housing equation indefinitely. However, if prices were to meaningfully move up all of this negative-equity driven shadow supply would appear as millions were finally able to get out. Paying attention to a historic indicator such as month’s supply based upon listed inventory in this unprecedented market will get you into trouble.

  27. Mannwich says:

    There goes f411 again distorting peoples’ posts to fit his own view of things. The beat goes on.

  28. Mannwich says:

    @f411: Are you sure you don’t work for the NAR? Are you Lawrence Yun? C’mon now. Fess up, young frankie.

  29. Bobby2 says:

    Clash for Clunkers=First Time Buyer’s Tax Credit

  30. DaveInDenver says:

    Lawrence Yun at the NAR spins tall tales for all:

    A closer look at the data, however, shows that not seasonally adjusted monthly sales for September shows a MUCH DIFFERENT STORY. Sales actually dropped 5.2% vs. August and were up 7.8% vs. last year. The median price dropped 8.5 vs. September 2008


  31. tsk tsk says:

    “Look at it this way: Think of how stupid the average person is and then realize that half of them are stupider than that. And it doesn’t take you very long to spot one of them does it? Take you about eight seconds. You’ll be listening to some guy… you say… ‘This guy is fucking stupid!’ Then… then there are some people, they’re not stupid… they’re full of shit. Huh? That doesn’t take very long to spot either, does it? Take you about the same amount of time. You’ll be listening to some guy… and saying, ‘well, he’s fairly intelligent… ahht, he’s full of shit!” — George Carlin

  32. djackson says:

    If you have any doubts on the cheerleading status of the NAR, their former economist put it this way to the WSJ:

    Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour. “I was there for seven years doing everything they wanted me to,” he said, looking out his window to his tree-filled yard in this Washington suburb. Mr. Lereah now works at home, trying to rebuild his career and saddled with a sagging portfolio of real-estate investments.

    The 1/12/09 article link: http://online.wsj.com/article/SB123152099299568447.html

  33. fusionbaby says:

    Everyone is desperate to survive. Integrity usually goes down the drain when financial pressures are extant. NAR is desperate. NAR is spinning. Human nature. Current events form future trends (Gerald Celente) so stay abreast of current events and actual statistics and you’ll know where you are headed.

    The banks can’t hold back and hide their foreclosures and REOs forever. Millions of more mortgages are going to reset over the next few years. Unemployment will continue. It’s all about jobs. Despite the government and all of their insane attempts housing prices will continue down towards affordability for a new (and lower) income level and standard of living in America.

  34. kblasi says:

    HarryWanger has hit it dead-on, and we all realistically know it to be true (whether admitting to it or not):

    The NAR economists talk their book. Period. Although it pains me to say it, they are therefore good at their job.
    “Now’s a great time to buy or sell a home!” (f%^*ing unbelievable.)
    Don’t get me wrong though, I still loathe them probably even more than Barry – I’m a renter (many, many years) waiting on the sidelines who is subjected to these pom-pom wavers every time another housing data point hits the wire. I’d like Lawrence Yun to shove the pom-pom up…never mind.

    The MEDIA, on the other hand, are the IDIOTS for quoting those same above noted economists (every…single…month) as though they are authorities who have no skin in the game.

    Then again, perhaps in the end the stupidity lies with any viewer who listens intently when [insert favorite CNBC anchor] reports, “National Association of Realtors chief economist Lawrence Yun says…”

    As far as Mr. Lereah is concerned, it sounds as though he bought into his own spin. Good for you, Dave. Good for you.

  35. Steko says:


    Money quote:
    “Sales always fell from August to September in the last few years. Thus to observe that sales fell in September vs. August on a Non-Seasonally-Adjusted (NSA) basis doesn’t say much. It’s like announcing that retail sales fell after Christmas.”

  36. I’ll do a post about what goes into how Seasonal Adjustments are performed in the coming weeks.

    Most people are unfamiliar with what goes into the statistical adjustments, and it allows folks (like the NAR) to make major misrepresentations

    Innumerates and the mathematically challenged (like the folks at Business Insider) simply do not understand the numbers


  37. [...] Rex pointed out, the past decade of August to September EHS changes [...]

  38. Onlooker from Troy says:

    “I was there for seven years doing everything they wanted me to,” he said, looking out his window to his tree-filled yard in this Washington suburb. Mr. Lereah now works at home, trying to rebuild his career and saddled with a sagging portfolio of real-estate investments.

    BOO HOOO! I feel sooo bad for this poor mistreated economist who sold himself and carried out the NAR’s sleazy agenda at the expense of home buyers.

  39. Ponchovilla says:

    They (NAR) are idiots full of shit selling to idiots full of shit (NRA any many many many others).

  40. fusionbaby says:

    Once housing hits bottom I’ll be there to scoop up incredible deals on income properties for my portfolio. Hopefully the timing will be right and I’ll leverage them all up just as the inflation wave takes off so the mortgages will become real cheap and easy to pay off. Borrowing for tangible assets is the 2 pronged approach needed to beat inflation. I don’t want to be a victim of Kenysian Economics, Obamanomics or any other misguided, corrupt theories. Inflation is coming and will redistribute wealth like nobody’s business… acting at the right time is the key.

  41. [...] (the home buyer credit that expires shortly). Chart from Calculated Risk, as modified by The Big Picture. Barry Ritholtz says this of NAR: I am honestly unsure of whether the folks at the NAR are dumb as [...]

  42. Very nice breakdown, Barry. No one does it better …

  43. [...] Existing Home Sales FALL in September 2009 [...]

  44. DeDude says:

    “acting at the right time is the key”

    You got that right baby. A lot of the current activity in the low price range is from people who think the time is now ;-)

  45. Winston Munn says:

    It’s not a lie – it’s an information fixer-upper.

  46. [...] The truth about yesterday’s Existing Home Sales data.  (TheBigPicture) [...]

  47. contrabandista13 says:


    You are way to charitable and well mannered…..

    “….Those are pretty much the only options: Idiots or full of shit. (You decide)…..”

    How about option number three…..? Both…..!

    Best regards,


  48. [...] Barry Ritholtz sprays the NAR with abject ridicule each month, and this time he went so far as to accuse them of “bullshitting America.” [...]

  49. [...] is very similar to the recent data from the NAR regarding September existing home sales. That seasonally adjusted data made it look like things got much better in the month; It was more [...]