Existing Home Sales Are Fantastic!

Existing Home sales were released today, and the data was soft. The WSJ reported

"Existing-home sales in the U.S. fell in December, capping a soft year that saw demand make its sharpest drop in 24 years.

Home
resales fell to a 6.22 million annual rate, a 0.8% decrease from
November’s revised 6.27 million annual pace, the National Association
of Realtors said Thursday. November’s rate was originally estimated at
6.28 million. Sales for all of 2006 dropped by 8.4% to 6.48 million
from a record 7.08 million in 2005
. The drop was the sharpest since
17.7% in 1982. The decrease in resales interrupted back-to-back
increases.

Some analysts say declining prices and soft demand has
discouraged some homeowners from selling. The December resales level was below Wall Street expectations of a 6.25 million sales rate for previously owned homes. (emphasis added)

The accompanying commentary was really amusing. The oft hallunicatory David Lereah (previously mentioned here and here) said:

“Despite all the doom and gloom stories and dire predictions
over the last year, 2006 was the third-strongest year on record for
existing home sales.”

It reminds one of the old joke — a guy leaps off the 108th floor of the Empire State Bulding. As he passes the 80th floor, he says, "So far, so good!"

That starry eyed obliviousness was simply too much for the Journal’s Marketbeat, who noted:

We’ve heard of trying to sugarcoat things, but this is ridiculous.
The National Association of Realtors said sales of existing homes just
ended their worst year since 1982, and NAR’s chief economist David
Lereah’s comment is this: “Despite all the doom and gloom
stories and dire predictions over the last year, 2006 was the
third-strongest year on record for existing home sales.”

Now there’s an assessment that might even make Baghdad Bob blanch.
Sales for all of 2006 dropped by 8.4% to 6.84 million, down from a
record 7.08 million in 2005. That’s the sharpest drop since the 17.7%
decline in 1982, when Ronald Reagan was occupying the White House. His first term. Roger Moore was playing James Bond.

The bottom line remains that Housing is still in freefall; Rates are rising, and Sellers have yet to get realistic about pricing.

And in a related development, while inventory data did improve, the official stats do not include "phantom inventory."  That is a potential overhang, as many sellers who were unhappy with the bids they recieved simply pulled their house
off the market. In the event there is any uptick in sales and/or prices, the phantom inventory
could rematerialize.

All in all, a rather punk report . . .

>

UPDATE: January 25, 2007 11:51am

Kevin Depew’s headline says it all:

"Existing-Home Sales Continuing to Stabilize In Terms of
Plummeting"

Hard to top that one . . .

>

Sources:

January Existing-Home Sales Ease
WASHINGTON, February 28, 2006

http://www.realtor.org/press_room/news_releases/2006/janehs06.html

Drop in Existing-Home Sales For 2006 Is Sharpest in 24 Years
By JEFF BATER AND BRIAN BLACKSTONE
January 25, 2007 10:37 a.m.
http://online.wsj.com/article/SB116973168689287635.html

All is Well!
David Gaffen

WSJ Marketbeat, January 25, 2007, 10:30 am
http://blogs.wsj.com/marketbeat/2007/01/25/all-is-well/

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