Matt Blackman

Housing Market Tracker - Home Sales/Price Review

There continues to be a lot of optimism out there promoted by the likes of the National Association of Realtors and other industry cheerleaders that the worst of the market is over. Case in point - in the NARs most recent news release on Pending Home Sales, chief economist and head cheerleader Lawrence Yun made the following comments, "“although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” he said. The group said it expects existing home sales to increase to 5.7 million in 2008 up from the most recent annual estimate of 5 million homes sold (November 2007).

Just for fun, we looked back at the NAR’s pending home sales report one year ago (Jan 4/07). On a year-over-year basis, November pending home sales had fallen 10.2% from November 2006 but that didn’t stop then chief economist David Lereah from claiming that the narrowing [in November from previous monthly reports] was a significant factor. “Because there is a stronger parallel between changes in the index from a year ago and the actual pace of home sales in coming months, the index is pointing toward fairly stable home sales in the near future,” Lereah said in the January 4, 2007 report. “That is another indicator that home sales likely bottomed-out in September [2006].” (See tinyurl.com/388uku ) Not only was his analysis way off the mark (existing home sales dropped another 20% over the next year), it sounds eerily familiar to that of his successor in the most recent statement. The cruel truth is that property markets around the globe have just come through the biggest bubble in history (see inflation-adjusted home price chart tradesystemguru.com/co... ) and such bubbles have never ended quickly or happily.