Existing Homes Sales Fall; NAR seeks a PhD in Absurdism

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"Existing-home sales slowed in April, partly because restrictive lending practices hampered home buyers. At the same time, more areas are showing gains, and a reversal in mortgage policy means the market is better positioned for a turnaround." (emphasis added)

-NAR, May 23, 2008

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Um, no.

Home sales fell for the follwoing simple and obvious reasons: 1) Prices are still too high; 2) a huge amount of supply is out there, and 3) there is a reasonable expectation on the part of buyers that prices will fall lower still.

Regardless of the data or what their own agents say, the folks at the NAR cannot help but shill for their industry — even when it has become totally counter-productive.  They are apparently quite happy with being known as the Worst. Forecasters. Ever.

How else can you explain their shameless twisting of their own data? Don’t these damn fools realize that they have simply lost all credibility? I have heard more than a few Real Estate agents complain that sellers have unrealistic expectations of prices, due in large part to the ongoing and ridiculous bottom calls and turnaround forecast form the NAR.

Perhaps the absurdist commentary that accompanies each monthly release means someone at the NAR is trying for a doctorate in Absurdism, and these monthly releases are their doctoral thesis. Nothing else (short  of blunt head trauma) explains the ridiculous monthly spin.

Rant over.

Let’s go to the actual data:

• Purchases declined 1% percent from March to an annualized rate of 4.89 million.
• Median prices fell to $202,300 from $219,900 in April 2007, about am ~8% drop from April 2007 (2nd-biggest historical decline), but was up 1% sequentially.
• Sales were down 18% from April 2007
• Inventory of existing homes jumped to 4.55 million, up from 4.12 million in March.
• Months supply for single family homes rose to 10.7 from 9.6, the highest since July 1985
• 11.2 months’ supply at current sales pace, up 10% from 10 months at the end of March (25 yr avg is 6.9 months)
• Months supply in condos/co-ops rose to 14.2 months from 12.8.

Bottom line: Rising inventory levels, ongoing price drops, falling unit sales means the bottom is nowhere in sight for the housing sector.

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Previously:
NAR and Housing Forecasts (June 2007)
http://bigpicture.typepad.com/comments/2007/06/nar_and_housing.html

Recent NAR Bottom/Turnaround calls (January 2008)
http://bigpicture.typepad.com/comments/2008/01/a-history-of-ho.html

Source:
Existing-Home Sales Ease Due to Mortgage Restrictions; Some Markets Rising
NAR, May 23, 2008
http://www.realtor.org/press_room/news_releases/2008/ehs_april08_ease

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James Galbraith, an economics professor at the University of Texas,
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click for video

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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aT2P76NSBpf4

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