Tuesday, April 24, 2007

March Existing Home Sales Down; Realtors Falsely Blame Mother Nature

The Realtors are busy blaming mother nature for the significant decline in existing homes sales. According to the National Association of Realtors the 'bad winter weather' in February was the main reason for lousy sales in March.



Unusually bad winter weather in February curtailed home shopping, slowing sales that closed in March, which may have been dampened further by a decrease in subprime lending volume, according to the National Association of Realtors(R).
So how much of a decline was there in March?


After rising for three consecutive months, total existing-home sales --including single-family, townhouses, condominiums and co-ops -- fell 8.4 percent to a seasonally adjusted annual rate(1) of 6.12 million units in March from a pace of 6.68 million in February, and are 11.3 percent belowthe 6.90 million-unit level in March 2006.

The spinmeisters as the NAR are hard at work, spinning the latest numbers. Their chief economist cheerleader David Lereah was quoted as saying:

"For the last couple months we've been expecting a weather 'hit' on home sales finalized in March, but looking at overall activity in the first quarter we see that existing home sales averaged 6.41 million -- a figure that is moderately higher than the sales pace during the second half of 2006," he said. "We also may be seeing some losses as a result of the subprime fallout.However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers.



"It's too early to measure a significant impact from tighter lending standards, which should moderately dampen activity, but we're still looking for existing-home sales to gradually improve during the last half of 2007,"


The months supply of existing housing has increased 30% from 5.6 months in March 2006, to 7.3 months last month. Inventory of existing homes sales has increased 17.1% since March 2006. Regionally, non seasonally adjusted sales have fallen significantly compared to last year (Year over Year (YoY)):



  • West: -16.8%
  • Midwest: -11.5%
  • South: -16.0%
  • Northeast: -6.9%

Hold on Realtors! Not so fast! The worst region for year over year percentage declines for March for existing home sales were in the West. The National Association of Realtors blames "Unusually bad winter weather in February" for "slowing sales that closed in March". However, the weather in the West for the month of February was better then normal. This would put a major whole in the Realtors spin that the weather was to blame for lousy sales. Despite nice weather in the West, there was still a 16.8% percentage decline in home sales compared to March 2006 [which was the largest percentage decline of any region]. See below:



These numbers are lousy. Don't trust the spin the National Association of Realtors puts on their numbers. The US housing market is still undergoing decline. The spring housing season has been lousy for sellers and members of the Real Estate Industrial Complex (REIC).

43 comments:

  1. Lereah is a wanker...he must have invented lier loans consider how good he is at lying.

    -Kevin

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  2. The NAR must really hate this blog by now.

    KEEP UP THE GOOD WORK EXPOSING ALL THE SHENANIGANS.

    A first time buyer that refused to listen to the propaganda. Now happy watching the collapse and home price drop substantially toward affordability.
    Prices in my bubble area need to drop at least 30%.

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  3. Are foreclosure sales purchased by banks being factored out of the sales figures? Any information on hoy they are factored in?

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  4. Priceless post David J. I love these kinds of posts that have sharp teeth. Good enough to make Lereah's mommy cry.

    And if the NAR thinks the weather was unusually bad this past February, wait till they see next February's 'weather.'

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  5. Some submarkets are doing well though.

    DC condo sales contracts jumped 8% in March 07 compared with March 06. Inventory declined almost 14% too.

    Sales of single family homes did not do as well and more or less matched the national trend.

    Lereah is doing his job, but he does sound like a wanker.

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  6. look here: www.dcbubble.blogspot.com

    the source is the Greater Capital Area Assn. of Realtors

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  7. Inventory declined almost 14% too.

    Keep buying them, they'll make more. ;)

    Does the inventory include the huge quantity of completed or near complete units that haven't yet been sold?

    DC, like everywhere else, will be hit. Now the question is why are the construction firms holding onto employees when starts do not justify such a move? My hypothesis is that they *need* the cash flow from the banks at they hit construction milestones that free up fresh loans. Anyone else?

    Got popcorn?
    Neil

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  8. Wannabuy asked:
    " Now the question is why are the construction firms holding onto employees when starts do not justify such a move? My hypothesis is that they *need* the cash flow from the banks at they hit construction milestones that free up fresh loans. Anyone else?"

    The vast majority of these units are already sold ... having been under contract since before a shovle hit the dirt.

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  9. Uh...Lance, no. Head over to DC Home and Condo Prices. On more than a few of these condo developments the majority of initial "buyers" walked away from their deposits. You're seeing 200+ unit builings which were "sold out" in 2005, now trying to sell 100 of said units which were dropped.

    Not to mention all of the "repartments" going on. Vaughan Place anyone?

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  10. Lance,

    No signif. drop in employment numbers is due to no filings of unemployment. BLS gets them from here, illegals dont go to the UE office,...

    Annon:

    Yes homes that go into FC are taken off inventory...

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  11. "The vast majority of these units are already sold ... having been under contract since before a shovle hit the dirt. "

    Right... until you factor in the fact that cancellation rates have been running at something like 30%, and that was before the subprime meltdown...


    Keep spinning lance... are you dizzy yet?

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  12. "The vast majority of these units are already sold ... having been under contract since before a shovle hit the dirt."

    And are trying to be resold by desperate flippers at falling and faling and falling prices...

    ReplyDelete
  13. "Does the inventory include the huge quantity of completed or near complete units that haven't yet been sold?"

    You've been predicting this for years now. The "Flood" hypothesis isn't happening.

    "And are trying to be resold by desperate flippers at falling and faling and falling prices... "

    Well, that's not what the data says. Too bad for you.

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  14. Smart Keith: "And are trying to be resold by desperate flippers at falling and faling and falling prices... "

    Dumb Anonymous: "Well, that's not what the data says. Too bad for you."

    Smart Keith: http://www.gcaar.com/statistics/2007-home-sales/dccc0307.pdf

    According to the charts, average and median price of condos are at least 8% lower than in March 05.

    In real dollars, that's 15%. We're already 60% of the way to David J's 25% real dollar fall, and this thing is just beggining.

    Dumb Anonymous: Keith is so much smarter than me.

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  15. I would like to take this opportunity to remind the housing heads that flat prices = real losses and declining prices = bigger real losses. We are now seeing declining prices nationwide and flat prices in the DC area.

    The bubble is deflating.

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  16. You do realize that the day after this, when the new homes report came out, that they stated the reason for the slight increase was the GOOD weather? Someone make up your mind already!

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  17. Just a quick bit of humor related to the initial post.

    Did anyone else notice that the day after the existing home sales decline was blamed on bad weather, the Post went to print on the new home marginal sales increase for the same time period, attributing it in part to "good weather"?

    Sometimes the humor writes itself, folks.

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  18. Anonymous said...
    "I would like to take this opportunity to remind the housing heads that flat prices = real losses and declining prices = bigger real losses. We are now seeing declining prices nationwide and flat prices in the DC area."

    I guess for you that would be good. 'Cept the numbers don't substantiate your self-interested wishes. Prices are UP in the District ... by A LOT! Just check the posts here over the last couple weeks. I don't mean to make you feel bad, but a dose of reality will help you in the end. Stop listening to David J. You'll need to get off your butt and do something (i.e., stop counting on the "falling in your lap theory that David is promulgating) ... and the sooner the better. You'll never be "priced out", but the longer you put off, the steeper the hill to climb ... Good luck ... get your ass in gear and get moving!

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  19. I'd be poorer if I'd listened to Lance and bought an asset that depreciated over these last few years, but I'm richer because I didn't buy and my portfolio has been gaining that money. It's just that simple.

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  20. lance said . . .
    "You'll never be "priced out", but the longer you put off, the steeper the hill to climb ..."

    Another quotable quote from lance . . . okay so I can never be priced out but if I wait longer it will cost me more . . . hmmm so then at some point the hill gets to be a cliff and I am priced out. The longer I wait the harder it gets . . . well shoot I'd best go get an IO/ARM NOW and become a slave to debt like lance . . . wow I wish I were soooo smart like you.

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  21. Lance. . . nowhere has David advocated, just do nothing you'll afford a house in 5 years. No . . .it's more of save, save, save . . . b/c now you can save more if you rent vs. buy . . . housing prices will drop and your hard work of saving will pay off.

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  22. Prices are up, Lance?

    http://www.gcaar.com/statistics/2007-home-sales/dccc0307.pdf

    That's from the Greater Capital Area Association of Realtors.

    2005 Median Price: $375,000
    Average Price: $426,576
    2006 Median Price: $354,100
    Average Price: $406,501
    2007 Median Price: $342,000
    Average Price: $390,036

    What kool-aid did your realtor give you that the above appears to be an increase?

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  23. Lance said...
    “I guess for you that would be good. 'Cept the numbers don't substantiate your self-interested wishes. Prices are UP in the District ... by A LOT! Just check the posts here over the last couple weeks. I don't mean to make you feel bad, but a dose of reality will help you in the end.”


    Reality? “Lance”, you’re overdue. How about posting some facts? Data? Numbers? Of course, you’re talking about a one-month trend, right?

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  24. Does the inventory include the huge quantity of completed or near complete units that haven't yet been sold?


    No, the realtors' data only includes existing homes, not new construction.

    As of 1Q2007, there were 21,523 units under construction or being marketed, with another 20,469 units planned over the next three years. In February 2007, there were 277 settlements on condos. So, even if the 20,469 never reach completion, we still have 6.48 year supply of condos at the February 2007 sales rate.

    SOURCE: http://www.washingtonpost.com/wp-dyn/content/article/2007/03/22/AR2007032202400.html

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  25. Keith said...
    Smart Keith: "And are trying to be resold by desperate flippers at falling and faling and falling prices... "

    Dumb Anonymous: "Well, that's not what the data says. Too bad for you."

    Smart Keith: http://www.gcaar.com/statistics/2007-home-sales/dccc0307.pdf

    According to the charts, average and median price of condos are at least 8% lower than in March 05.

    In real dollars, that's 15%. We're already 60% of the way to David J's 25% real dollar fall, and this thing is just beggining.

    Dumb Anonymous: Keith is so much smarter than me.


    LMAO! Stupid trolls never learn.

    ReplyDelete
  26. Prices are UP in the District

    Source?

    ReplyDelete
  27. Lance said...
    “I guess for you that would be good. 'Cept the numbers don't substantiate your self-interested wishes. Prices are UP in the District ... by A LOT!”

    http://www.bizjournals.com/washington/stories/
    2007/04/23/daily14.html

    -Area home prices down more than 4%
    Washington Business Journal - 11:54 AM EDT Tuesday, April 24, 2007

    A private industry survey shows home prices in February nationwide were down 1 percent, and the year-over-year decline in Washington was 4.33 percent. -

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  28. "I guess for you that would be good. 'Cept the numbers don't substantiate your self-interested wishes. Prices are UP in the District ... by A LOT! Just check the posts here over the last couple weeks."

    Who's posts? Yours, Lance? You are a proven liar.

    Also, I don't 1) live around DC or 2) rent. I've already cashed out of a bubbly area and bought in a non-bubbly area, and the profits made in 5 years of ownership - tax free - in a bubbly area covered my entire house in a non-bubble area. If you think that the kind of price gains that made my escape from the mortgage trap are sustainable, you are one stupid person.

    Anyway, once again since you are clearly clueless, flat prices = real losses. That is a fact as long as inflation is greater than 0%. And prices are flat or falling in most bubbly areas.

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  29. Dead cat bounce coming this spring? I'm seeing signs of it

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  30. Yawn ... Robert ... just run the local numbers and stop lieing ... No one here cares what is happening in other areas. They care what is happening here in Washington where they want to buy. And the numbers are up A LOT here!

    From www.MRIS.com ... numbers for DC for March:

    Average Sold Price:
    2007: $561,789
    2006: $490,024
    Change: +14.65 %

    Median Sold Price:
    2007: $434,500
    2006: $397,000
    Change: +9.45 %

    Total Units Sold:
    2007: 653
    2006: 651
    Change: +0.31 %

    (To access the database go to "News" and then "Market Statistics" and then choose "Real Estate Indicator $100K - $5M" and then run a report for "Washington, DC".)

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  31. LMAO! Stupid trolls never learn.

    Hi JuliusCleaver.

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  32. Okay lance, I'll bite on this one. The following is the past year's (march 06 to march 07) worth of data of DC from MRIS in month, Avg. price(k), median price(k), %change(avg$), 2-month moving avg (avg$), and 2-month moving avg (med$).
    feb 502 400 - - -
    mar 490 397 -2.3% 496 398.5
    apr 531 425 8.3% 510 411
    may 568 420 6.9% 549.5 422.5
    jun 580 430 2.1% 574 425
    jul 530 415 -8.6% 555 422.5
    aug 514 397 -3.01% 522 406
    sep 564 455 9.7% 552.5 426
    oct 472 375 -16.3% 518 415
    nov 497 410 5.2% 484.5 392.5
    dec 502 388 1.0% 499.5 399
    jan 499 385 -.5% 500.5 386.5
    feb 490 388 -1.8% 494.5 386.5
    mar 561 434 14.4% 525.5 411

    As you can see the data jumps around quite a bit-so I took a smoothing function of a 2-month moving avg to help smooth out the data. If you look at all the other surrounding areas you will see definite patterns of a declining market and the #s don't jump around quite as much. You don't go from 564 to 472 (-16%) in one month and in another go from 490 to 561 (14%) in other NOVA areas.

    I'm not sure what causes these drastic spikes and dips, I don't know if it's the actual market or if there is some underlying cause like faulty data gathering. Maybe it's related to Congress and when they are in session or the new Congressmen coming into town (I don't know haven't researched it).

    If you take the region in whole, NVAR, DC, GPAAR, FAAR, PWAR . . . and look at the entire region it is not looking like 14% increases are back again . . .nope it looks like more declines.

    Even taking into account the 14% increase in the past month the moving average of the median price and the avg price is well below the high of last years 2-month moving avg. Did last month's 14% increase mean a change . . . well we'll just have to wait and see what next months data is . . . but my point is don't start gloating yet b/c the data doesn't support it.

    p.s. sorry for the formatting hopefully its readable

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  33. Lance said...
    “Yawn ... Robert ... just run the local numbers and stop lieing ... No one here cares what is happening in other areas. They care what is happening here in Washington where they want to buy. And the numbers are up A LOT here!”


    Wow “Lance”, you were referring to a one month trend (yawn). Nice. And since you seemed to have just skipped over The S&P/Case-Shiller report, I’ll post it again for ya:

    http://www.bizjournals.com/washington/stories
    /2007/04/23/daily14.html

    -Area home prices down more than 4%
    Washington Business Journal - 11:54 AM EDT Tuesday, April 24, 2007by Jeff ClabaughStaff Reporter

    A private industry survey shows home prices in February nationwide were down 1 percent, and the year-over-year decline in Washington was 4.33 percent.
    The S&P/Case-Shiller report, which measures housing prices in the 20 largest U.S. metropolitan areas, indicates that price declines may be accelerating. The 1 percent drop in year-over-year prices followed a 0.1 percent drop in January, the first decline in prices noted in the report since 2001-

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  34. I compiled a chain by taking DC sale prices in from April 2005 to March 2007.
    Average sale price:
    536K-535K-517K-543K-543K-509K527K-558K-581K-520K-502K-490K-531K-568K-580K-530K-515K-564K-473K-497K-506K-499K-490K-562.5K

    Median sale price:
    414K-425K-415K-430K-435K-419K-425K-440K-400K-400K-400K-397K-430K-420K-430K-415K-397K-455K-375K-410K-388K-385K-389K-434.5K

    DC metro data from www.MRIS.com:
    1st line - Average Sold Price
    2nd line - Median Sold Price

    March 2007 to March 2006
    $ 561,789 $ 490,024 14.65 %
    $ 434,500 $ 397,000 9.45 %

    February 2007 to February 2006
    $ 490,276 $ 502,712 - 2.47 %
    $ 388,990 $ 400,000 - 2.75 %

    January 2007 to January 2006
    $ 499,302 $ 519,768 - 3.94 %
    $ 385,000 $ 399,900 - 3.73 %

    December 2006 to January 2005
    $ 505,792 $ 581,613 - 13.04 %
    $ 388,250 $ 400,000 - 2.94 %

    November 2006 November 2005
    $ 497,291 $ 558,487 - 10.96 %
    $ 410,000 $ 440,000 - 6.82 %

    October 2006 to October 2005
    $ 472,770 $ 526,812 - 10.26 %
    $ 375,000 $ 425,000 - 11.76 %

    September 2006 to September 2005
    $ 564,200 $ 509,376 10.76 %
    $ 455,000 $ 419,000 8.59 %

    August 2006 to August 2005
    $ 514,565 $ 542,767 - 5.20 %
    $ 397,250 $ 435,088 - 8.70 %

    July 2006 to July 2005
    $ 530,170 $ 542,684 - 2.31 %
    $ 415,000 $ 429,850 - 3.45 %

    June 2006 to June 2005
    $ 580,167 $ 517,200 12.17 %
    $ 430,000 $ 415,000 3.61 %

    May 2006 to May 2005
    $ 568,371 $ 534,863 6.26 %
    $ 420,000 $ 425,000 - 1.18 %

    April 2006 to April 2005
    $ 531,158 $ 536,336 - 0.97 %
    $ 425,000 $ 414,450 2.55 %

    Yawn ... Lance, learn how to use data...

    Cheers!

    ReplyDelete
  35. Wow, Lance actually has a post with some facts and research. We bubbleheads may actually be a good influence on our boy.

    The general story Lance wants to tell is that DC is just swell and getting better while the outer areas are the ones crashing, and never the twain shall meet.

    Unfortunately, a closer zip code by zip code look at MRIS indicates a slightly more sobering picture for the "DC is immune" crowd.

    What we saw in 06 is the beginning of a downturn, and all beginnings of downturns start in the more marginal areas. And the more marginal (but still not awful) areas in DC, Alexandria, and Arlington have been hit hard.

    For instance, if we look at zip code 20009 (Dupont and Columbia Heights), things look pretty good. The average is down, but the median is up around 9.5%. The average days on market has gone up, but inventories still look reasonably tight. So is Lance right that DC is can't lose territory?

    Well, no. Zipping over to 20001 (Shaw/Ledroit), a more marginal part of DC that was supposed to be the next stage in Lance's "rings of growth" projection, the average price is down 2%, the median price is down 7%, days on the market has doubled to about 4 months, and inventories are at 7 months for condos and 8 months for houses.

    Looking at Alexandria, 22301 (Del Ray) and 22305 (Lynhaven) jumped, while 22304 (Landmark) dove.

    In Arlington, 22201 (Rosslyn, Courthouse, Clarendon) was flat, while 22204 (Columbia Pike) was down 2.5% median and 8% average.

    So what does this mean? Well it means that people are not flocking inwards while the outer suburbs died. It means that marginal areas in general took a big hit and have a big (and growing) inventory overhang. And that's where downturns start, before the tide washes to the better zip codes.

    And all of this is before the tightening of lending standards and the subprime debacle. So the pain train is likely just starting.

    There is one piece of somewhat more optimistic news. Inventories in the DC area did not bump up much during this last week.

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  36. Oh, some more MRIS fun. The increase in DC is pretty much entirely accounted for by the 20007 Zzip code (Georgetown). There, the median price rose by 56%.

    The only indication of any problems there is the large increase in average days on market.

    So Lance's theory might actually be true for Georgetown. Too bad it's not true for his zip code.:)

    After all, the median [rice in 20009 went up, but Lance himself argues his place isn't the median, it's a super cool rowhouse...and the average price in 20009 actually decreased slightly while the media rose, and that indicates a slight decline at the upper end of that market.

    So, once again, Lance loses.

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  37. Looks like Lance is going to ride this train to the end. Lance, sorry to let you know but the housing market is toast. The easy money is dried up, the corrupt lenders and RE agents are being held accountable. I watch my home decline in value weekly as the fire sales are roaring. Oh' well, at least my kid will be able to buy.

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  38. Geez, your all a little bit out of control.

    How about this fact - 10 years ago the annual home sales were approx 4 million, now is this "drastic slowdown" it is 6.1 million annually. In my books a 50% annual increase is amazing regardless of the slowdown. Did our population grow by 50%? Our country is an amazing economy.

    You can try, and yes you can use all of the current numbers to support your view, to claim the RE industry is in trouble. But the reality is that it is still a juggernaught of activity. It is still strong and it will remain strong. It achieved a false high that needed some steam to come out of it. But the american dream is alive and indeed very healthy.

    Just because the resale values have come down from ridiculous highs does not mean anything other than the market is recalibrating itself and getting property values back to where they really should be.

    So for you negative nabobs - your simply wrong.

    For the champions - you are more right that the market is still healthy but it is in the process of reconciling overinflated pricing. This is what a free market is all about.

    Speculators and flippers had high returns but the warning has always been with investments like this that for high returns you must take high risks. And those high risks are coming home to roost. To bad so sad.

    Now the dream is more affordable without the speculative element in the market. And that is a great thing.

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  39. anon 1:09 said "But the american dream is alive and indeed very healthy."

    Yeah not in DC unless you want to a) mortgage (i.e. leverage) yourself to the hilt by paying more than 50% of your take-home on a place and b) get married or shack up and convince your spouse/SO that both of you working is really in the best interest so you can afford the aforementioned american dream. Never mind having kids . . . kids bahh we'll just drop them off at a day-care they are just toys just like our brand new house.

    Nope my friend for the working, conventional family the american dream is all but dead for right now in the DC area . . it can come back but it is dead for right now. . . either rent or be house-poor and have your wife work, put kids in day-care, and then wonder why kids do so many bad things these days.

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  40. Lance or Anon 1:09,

    Let the fire sale fizzle out and then the American dream will become true for all to enjoy. Just watch:)

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  41. They're heeeeeere:

    "TRUSTEE SALE 1021 North Garfield Street Unit 604
    TRUSTEE SALE 1021 North Garfield Street Unit 604, Arlington, VA 22201 In execution of a Deed of Trust in the original principal amount of $307,500.00, with an annual interest rate of 6.05% ARM from Jui Y. Li, Linda Chen and Robert Yung dated July 29, 2005 recorded in the Clerk's Office of the Circuit Court of the County Of Arlington, Virginia, in Deed Book 3880, at page 401, default having occurred in the payment of the Note thereby secured and at the request of the holder of said Note, the undersigned Substitute Trustee will offer for sale at public auction at the entrance to the Circuit Court Building, Justice Center, 1425 Courthouse Road, Arlington, Virginia, on May 11, 2007 at 2:00 o'clock pm the property described in said deed, located at the above address and briefly described as: Condominium Unit 604, Clarendon1021, a Condominium, including garage parking space No. G2-155 and storage space #S6-17, as shown on condominium instruments recorded in Deed Book 3854, Page 698, together with an undivided interest in the common elements. TERMS OF SALE: CASH: A deposit of $20,000.00, or 10% of the sales price, whichever is lower, cash or certified check, will be required at the time of sale with settlement within fifteen (15) days from the date of sale. Additional terms may be announced at the time of sale. Pursuant to the Federal Fair Debt Collection Practices Act, we advise you that this firm is a debt collector attempting to collect the indebtedness referred to herein and any information we obtain will be used for that purpose. SAMUEL I. WHITE, P.C., Substitute Trustee This is a communication from a debt collector. FOR INFORMATION CONTACT: SAMUEL I. WHITE, P.C. (2051-07/CONV) 209 Business Park Drive Virginia Beach, Virginia 23462 757-457-1460 - Call Between 9:00 a.m. and 11:30 a.m. ASAP# 848591 05/01/2007, 05/08/2007"

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  42. When the numbers suck in May & June will it be because it was to nice outside to go home shopping? "People would rather be at BBQ's and baseball games."

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