November 28, 2006

FLASH: Used home sales (supposedly - NAR stat) plummet 13% in October

Remember having the NAR report on home sales is like having Bernie Ebbers report on MCI earnings. Don't forget that the NAR doesn't take into account the massive use of incentives to move dead inventory, and their data collection methodology is laughable.

But here's the latest for HP'ers keeping score at home.

The National Association of Realtors, the country's trade association for real estate agents, reported that national sales of existing homes, both single-family homes and condominiums, sagged 12.7 percent in the third quarter compared to the same period last year. Sales were down to a seasonally adjusted annual rate of 6.27 million units, the NAR reported.

Nine states had sales declines of 20 percent or more over the summer with the biggest declines in states that were once the hottest. Sales fell by 38 percent in Nevada; 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California

Not surprisingly, the weakness in sales translated to price declines -- 45 metropolitan areas in the country experienced price declines, including the Washington area, according to a separate survey also released today by the agents' association.

I saw this funny spin on the Lereah quote over at seekingalpha:

Perhaps the usually hallucinogenic David Lereah, the Realtors' chief economist, got it is right this time: "With the market in full transition, buyers now have choices [read: more inventory] and sellers are more willing to negotiate [read: desperate]. Under these circumstances, it's no surprise that overall home prices are slightly below a year ago."


Anonymous said...

Zillow still shows my home is worth $90,000.00 more than I paid for it three months ago.

kilobar said...

Lereah isn't an economist. He's the NAR's Master of the Obvious.

blogger said...

Durable goods orders down 8%

Dollar in freefall

Home sales plummeting

Foreign markets tumbling

Iraq civil war finally declared by NBC News

Should be an ugly week

Anonymous said...

Ugly week followed by ugly decade.

twib said...

Winter of discontent.

Anonymous said...

It was the Best of Times (for holders of gold), It was the Worst of Times (for holders of pretty much anything else)

Anonymous said...

methinks the republicans are just preying we can hold out till next year so they can blame it all on the democrats in congress.

Anonymous said...

thats a freudian slip. i meant "praying" and not "preying".

i think i like "preying" better.

Bake McBride said...

From USA Today:

"I've been in real estate here for 18 years," says Mia Edsall, an agent at Paragon Properties in the southern part of the valley. "I've seen it slow but never like this. There are no buyers, and the reason there are no buyers is because they can't sell the house they have. A lot of us (agents) are getting second jobs."

The Thinker said...

Vietnam was a civil war too.

Paul E. Math said...

So much for the nationwide advertising blitz, proclaiming that 'now is the perfect time to buy or sell a home'.

The NAR spent all that money on advertising and the prices continue to slide.

Anonymous said...

"Zillow still shows my home is worth $90,000.00 more than I paid for it three months ago. "

Who cares what Zillow claims!? You Dunce! It does not mattter; all that matters is how much someone will offer you for your house!

Anonymous said...

Mortgage Broker here.
One reason there are no buyers is we sucked in all the potential first time buyers during the last 4 years of low rates. Not only that, but with the lax lending standards, we also sucked in all those buyers who would not have been first time buyers for another year or two--- people who normally would have taken a year or so to save a down payment, pay off some bills, or repair some bad credit. Now there is no one left to buy and there won't be for a couple of years.

Anonymous said...

"sucked in"

interesting choice of words.

Anonymous said...

There is going to be one whale of a hangover when this party dies. Lereah was spiking the punch bowl like nobody's business and the guests were smoking crack in the bathroom. When they finally wake up it will be all over but the crying (and puking).

Anonymous said...

This is news from LAST Monday.

Existing Home Sales Sag in Third Quarter

By Daniela Deane
Washington Post Staff Writer
Monday, November 20, 2006; 1:24 PM

Nov. 28, 2006, 10:19AM
Existing home sales rise, prices fall

Anonymous said...



Anonymous said...

Here's a link I found over at BJ's boring puke bucket blog. I let those putzs do some of my research. Look out below!

foxwoodlief said...

Zillow is dead wrong and inaccurate. I watch prices and can't make heads or tails out of their methodology. First there is the issue of resales. If you had none for six months how can you say a house has risen or declined in value? I've seen homes in phoenix go up $12,000 one week, down $1,000 the next etc and no homes have sold in that neighborhood for six to eight months. Then I look at homes in Austin and in my neighoborhood most of the addresses are shown as undeveloped lots (many built on in the past five years) and the price range even for those lots in various stages of construction show a spread of $300,000....NOT, but then the one or two houses that actually do show up completed will rise $12,000 one week, drop $50,000 the next. Hello? Austin vs Phoenix? Prices here suppose to be balanced to undervalued and a price drop like that where in Phoenix where prices are 40% overvalued they rise?

Of course I look at the comps they use in Austin and will show five solds, all one to nine miles away, no comparables to reflect price changes. Hard to compare a 1400 sq ft 1988 house nine miles east out of the hill country with a home twice that size in the hills and brand new, but Zillow does.

I'd only trust Zillow if they showed the price and backed it up with comps that are current.

foxwoodlief said...

As far as statistics go, perspective please! So what if sales drop 13% in October? Lets say I sold on eBay and in November 2005 I sold $1,000 and this November I sold $900, that is a ten percent drop but if in 2004 I sold $700 and I compared November 2006 with 2004 that would show an increase.

We all know home starts in 2005 were at a peak. We need to compare the average over say ten or fifteen years to get a clearer picture of what is going on. Sort of like the Euro. If it was introduced at $1.19 then that would be a base point to compare the decline in the dollar, so we could say since 2000 it decreased 10% but if we take the low of 78 cents then we could say the euro has appeciated almost 90%.

If in Phoenix sales in 2006 are in the 56,000 range there has been a slowdown and decrease over 2005 but compared to 2002-24 that is still an increase.

Anonymous said...

It was the Best of Times (for holders of gold), It was the Worst of Times (for holders of pretty much anything else)

Tuesday, November 28, 2006 3:38:56 PM

Big deal. How will gold save you from mad cow infected beef, or nile virus poultry? If there's no medical care then what good is gold?
For every financial collapse there is a physical collapse and it's the later that will git ya.

Anonymous said...

For all of those who claim to have gold - it better be in your possession. Gold "on paper" is just like everything else on paper - worthless.

Anonymous said...

Yeah, enough with the gold already. When the time comes, all bartering will be done with a gun in your face, because you can't eat gold.

Anonymous said...

I fear you may be right anon. I have significant holdings in brass and lead because of this.

Anonymous said...

if there is a gold bar on table with you and myself sitting at either end.

and you have a piece of paper that says the gold bar belongs to you.

and i have a .45 magnum.

absent any third party authority, who owns the gold bar?

Anonymous said...

Hmmmm, the guy that shot the guy holding the gold cerificate? It's .45acp by the way.

Anonymous said...

speaking of zillow, a few months ago i went to look at a house in Monterey. it was on sale for 1.5 mil. Zillow had it priced at 900,000. That's 66% off. useless.

Anonymous said...

Greenspin in full CYA mode

Anonymous said...

all that matters is how much someone will offer you for your house!

You make my point. Zillow is not following prices down. Another Shill?

Additionally, my home is not for sale at any price.

Anonymous said...

Zillow had it priced at 900,000. That's 66% off. useless.

Well, I had not seen this when I posted above comments. So, Zillow is just WRONG.

Anonymous said...

To paraphrase what Red Green said.

Forget World of Warcraft or Quake 4 or whatever the latest fancy role-playing game is.

There's another one just around the corner that's so lifelike it will make these others seem like Pong.

It's called "reality".

Miss Goldbug said...

For all of those who claim to have gold - it better be in your possession. Gold "on paper" is just like everything else on paper - worthless.

I dont' know... Newmont Mining did very well in the 1970's- just check out their stock price back then on their website.

Anonymous said...

It's .44 Magnum. not .45 you nimrod.. haven't you seen Dirty Harry movies???

Anonymous said...

You know what. Statistics are just that. I don't trust them, especially when the people producing them have a vested interest in those values.

Open your eyes and look around and decide for yourself. matters in that it shows you comps, recent sales of similar houses in your neighborhood.

Around here (Running Springs, California) buyers are asking 30% more than the comparable prices these houses are selling at. One house, seller is asking 875,000, similar houses in neighborhood, 535,000. Dream on.

All I can say is, the longer the sellers wait for reality, the less they will get when they finally do sell.

And I don't care if the NAR is lying. The longer the crash is prolonged with fake statistics, the bigger the shock will be when everyone finally finds out what's really going on.

Anonymous said...

Incentives aren't part of the resale side of the market Einstein.

Anonymous said...

Bread spoils eventually

You can't eat Gold......
nor can it protect you physically....unless it's a gold plated revolver!
Gold on paper in solid secure times is great.....
These ae not secure times!

Anonymous said...

Everyone talks about Gold for barter if times get tough.

Well, who sets the trade standard

Will a loaf of old bread be worth 1/10 oz. or 10 oz. or....?

Better bring your gun during negotiations!

But I'm sure the bread salesman will as well!

Anonymous said...

That photo: isn't that being upsidedown in your home?