Dennis Norman
NAR’s “seasonally-adjusted” numbers show sales up 7.4 percent for the month…”actual” numbers show a 5.2 percent decrease….Sales up 44 percent from last year, lest we not forgot last year was the worst in over 10 years…
According to the latest report from the National Association of REALTORS(R), existing home sales in November increased 7.4 percent to a seasonally adjusted-annual rate of 6.54 million units in November from a revised level of 6.09 million units in October, and are 44.1 percent higher than the 4.44 million-unit pace in November 2008. Existing home sales are now at the highest level since February 2007 when it hit 6.55 million.
NAR’s Chief Economist, Lawrence Yun, said of the increase in existing home sales “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit…”. I agree but would describe the effect of the homebuyer tax credits on the housing market like a kid’s sugar rush; the same analogy I used in a post about the spike in new home sales, which was followed a report earlier this week of new home sales taking a dive the following month.
I don’t like “seasonally adjusted rates of sales”:
If you have been reading my posts for a while you know by now I don’t like “seasonally adjusted” numbers, particularly when artificial stimuli, such as homebuyer tax-credits, can cause an unseasonal spike in sales activity. I much prefer to see the actual numbers and try to garner from them what is going on in the housing market.
When looking at the ACTUAL Existing Home sales reported by NAR I found that home sales actually declined 5.2 percent from October’s sales of 498,000 units to 472,000 units in November. Comparing sales for November 2009 to the year before there was an increase of 46.6 percent but don’t forget, buyers we’re racing the clock to buy a home before the credit expired (it has since been extended).
Through November 30, 2009, there have been 4,743,000 homes sold compared with 4,552,000 at the same time last year for an increase of 4.2 percent. Now, while this is good, to keep it in perspective we have to remember we are comparing our current numbers to a year that saw the lowest number of existing homes sold in over 10 years. I’m not being a pessimist, I’m just saying we need to take this for what it is…baby steps toward a leveling-off of the market.
Other highlights of the NAR Report:
- Median price of homes sold in November in the US was $172,600, ab about the same as October’s revised median price of $172,200 and down 4.3 percent from November, 2008 when the price was $180,300.
- Distressed sales accounted for 33 percent of all home sales in November, up from 30 percent in October.
- Total housing inventory at the end of November was 3,520,000 homes for a 6.5 month supply (based upon “seasonally adjusted rate of sale”) – by my calculations, based upon my estimate of sales of 5.143 million homes for 2009, I say the supply is equal to about 8.2 months. (Beware of the growing “shadow inventory” though…more on that later)
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