If you’re reading this blog right now, then you are likely the type of person who has already checked out the existing home sales news today from the National Association of Realtors. Existing home sales fell 1.2 percent in October from the month before (I know I know, so many of you hate when I go monthly, but I have a point, really I do), after much further in the previous two months, 8.2 percent in Sept. and 4.7 percent in August.
The NAR’s new Chief Economist, Lawrence Yun, suggested that the smaller drop in sales could mean that the mortgage issues are easing a bit. Well, I’m not so sure.
On a monthly basis, the number is better, but if you look year over year, the numbers are actually getting worse. In August, existing home sales fell 12.8 percent from August of 2006, in September they were down 19 percent from 2006 and in October, down nearly 21 percent from October of 2006. Sales are clearly getting far worse than this small monthly number might indicate.
Now a lot of you have been complaining to the blog (yes, I’ve decided the blog has a life of its own) that NAR is just a spin machine when it comes to the numbers, painting a rosy picture, suggesting that everybody go out and buy each other a house for Christmas/Hanukkah/Kwanza: all the meanwhile revising down their forecasts. Here’s what Lawrence had to say about that when I put the complaint to him this morning:
"I'm glad we are living in a free society where we have the right for the bloggers to blog and have fun at it. So it's great that people can blog. In terms of the forecast, we have revised down our forecast based upon all the fresh information that arrives in the latest month and as a result we think it's responsible to modify the forecast incorporating new information. We have revised down our forecast by, I believe, by 8 straight months according to some bloggers. I have never kept track of it. I just try to make the most accurate forecasts, but because of this information I have been tracking the blue chip forecast on the housing starts, they don't have a forecast for the home sales, but on the blue chip which is comprised of Goldman Sachs and Merrill Lynch and many others, and they have revised down their housing forecasts for 20 straight months. The fact that NAR is getting a lot of publicity, that's all good for us that people are paying attention to what we are saying, but just factual information, I think everyone from Merrill Lynch, Goldman Sachs they are revising down their housing market forecast."