If we looked at existing home sales ex-REOs [Real Estate Owned by banks], we'd see that sales are still collapsing. And based on the recent MBA data, there is a flood of foreclosures coming. So maybe it will appear that sales are leveling out as the market is taken over by foreclosure sales, but that just puts more pressure on prices.
So the two key points from the Pending Home sales report are that prices are probably falling quickly, especially in the low end areas, and that sales are being propped up as REO sales start to dominate that existing home market. Neither point is good news for housing.
Tuesday, June 10, 2008
Calculated Risk Analyzes the Pending Home Sales Numbers
The Calculated Risk blog explains why the just-released pending home sales numbers are not as good as the press has made them out to be. In fact, Calculated Risk says, they are actually a negative omen for the future of housing prices.