RE Report
The National Association of Realtors released Pending Home Sales data today and their findings reveal a One Tenth of One Percent supposed increase. One tenth!
Now mind you, that in any data set, a standard/typical margin of error is + or – 1% to 2%. So the One Tenth is negligible. 0% and may even be negative.
What the NAR doesn’t release is how many of those pending sales fall through- due to unapproved mortgage loans and/or potential buyers who back out for whatever reasons.
The NAR is now touting that Pending Sales have risen for the fourth straight month. But a closer examination will reveal that the data is inconsistent and unreliable. Also, the NAR does not release data on foreclosures- that is why companies like RealtyTrac have filled the gap.
Foreclosures are still increasing- and have also contributed significantly to the weak sales activity.
The NAR also does not provide to the public Days on Market (DOM) which are rising. The NAR does not release to the public List/Sold price ratio either.
This info is not classified or secretive, the fact is that if the public had access to all of the data- it would show the real and true picture of the housing market.
The bottom line is that, this info in anything but a ‘up’ market hurts their marketing propaganda campaigns. The housing market is not going to stabilize anytime soon because of some of the following reasons;
- Credit issues (tighter loan standards from lenders)
- Debt
- Job loss (still increasing and will for the remainder of ‘09)
- Flat to decreasing wages
- Loan Deliquencies
- Loan Defaults
ARM resets- from 2004 to 2007, there was $750 Billion dollars worth of option ARM loans granted and taken. The MBA predicts that more than half of all outstanding option ARMs will eventually default.
This could result in a massive flood of additional foreclosures and a continued slide of the housing market overall. There will be some regions and cities where housing does in fact stabilize and even slightly increase.
Unless the tide of foreclosures can be halted and jobs created/re-instated, there will be no real improvement on a national level for a long while.
