RealtyEconomics | May 7, 2008
The NAR has reported pending monthly housing sales for March, and as expected the numbers are in negative territory once again.
The seasonally adjusted index of pending sales for existing homes fell to 83- from a downward revision in February of 83.8, which was the index’s previous low. By comparison, the index was at 103.9 in March 2007 – a significant decline of 20.9 or 20.19% from the previous year.
A month ago the NAR reported that the U.S. housing market had weakened in March, as resales of homes fell, inventories climbed, and prices continued to drop. Resales of U.S. houses and condos declined another 2% to a seasonally adjusted annualized rate of 4.93 million from 5.03 million units in February of this year.
Expect sales and prices to continue to fall for the remainder of 2008 and perhaps beyond. Forget about the “spin” doctors and eternal hopefuls who don’t pay attention to hard economic data – instead, trying to divert attention away from fact towards fantasy. First and foremost is inventory, there is simply too much at this point and time, and the lending environment has become very restrictive as well. Factor in the consumer debt to savings ratio which is substantially lopsided – with debt far outweighing savings. Energy and food inflation is still rising and it seems that higher prices are here to stay, and foreclosures are at an all-time high with much more to come by all indications.
Do not be fooled by the rhetoric and false promises, there is no “bottom” in the near future. The housing slump has to run its course, and the process could take up to another year or two – depending upon – job growth, inflation, consumption, and debt factors. The Real Estate industry is mostly in denial mode as they have been for over the past year, refusing to believe the cold, hard facts of the unofficial recession the country is in. Contrast the propaganda to the very real $3.45 per gallon of gas at the pump, the tremendous increase in groceries(about 40%), and the factual loss of equity in most homes purchased over the last 7 years – and the reality is quite different from the picture some organizations and individuals attempt to paint.
