December 10, 2007
NAR Adds 0.18% And Aims To End The Year On A Positive Note
For the first time in nine months, the National Association of Realtors has revised their forecasts for national existing home sales in 2007 and 2008 upwards.
In both cases, however, NAR's revised forecasts have added 10,000 home sales to last month's estimates of 5.66 and 5.69 million (2007 and 2008 respectively). And in both cases it represents an increase of 0.18% over last month's forecasts (which seems to be more spin than substance) and a drop of 12.5% as compared to 2006 (which would represent the lowest level of market activity since 2002).
The trade group also said its index that forecasts near-term home sales inched upward in October. The trade group's seasonally adjusted index of pending sales for existing homes rose 0.6 percent to 87.2 from an upwardly revised September index of 86.7, but was down 18.4 percent from a year ago — the third-largest year-over year decline on record.
The Realtors group also said the median price for U.S. existing homes — the point at which half sold for more and half for less — will sink by 1.9 percent to $217,600 this year and rise 0.3 percent next year to $218,300.
∙ Realtors' Forecast Bucks Common Wisdom [Associate Press]
First Published: December 10, 2007 9:17 AM
Comments from "Plugged In" Readers
Foreclosures count as home sales:
"Foreclosures change the name of which the deeds are held, which then is counted as the sale of existing house. This is also true for new home sales when a builder fails on his builders loans like the majority do in these conditions."
uh-oh.
Posted by: Pete at December 10, 2007 9:40 AM
Can't get enough of those FunYun's
Posted by: badlydrawnbear at December 10, 2007 9:47 AM
"Always a good time to buy or sell a house!" (TM)
Posted by: Jimmy (Bitter Renter) at December 10, 2007 9:53 AM
A less optimistic view from an 'insider',
link http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/
In Northern California, a household income of $90,000 per year could legitimately pay the minimum monthly payment on an Option ARM on a million home for the past several years. Most Option ARMs allowed zero to 5% down. Therefore, given the average income of the Bay Area, most families could buy that million dollar home. A home seller had a vast pool of available buyers.Now, with all the exotic programs gone, a household income of $175,000 is needed to buy that same home, which is about 10% of the Bay Area households. And, inventories are up 500%. So, in a nutshell we have 90% fewer qualified buyers for five-times the number of homes. To get housing moving again in Northern California, either all the exotic programs must come back, everyone must get a 100% raise or home prices have to fall 50%. None, except the last sound remotely possible.
What I am telling you is not speculation. I sold BILLIONs of these very loans over the past five years. I saw the borrowers we considered ‘prime’. I always wondered ‘what WILL happen when these things adjust is values don’t go up 10% per year’.
Posted by: dissent at December 10, 2007 9:57 AM
NAR = Not Actually Relevant
Posted by: Amen Corner at December 10, 2007 10:57 AM
These forecasts are useless. The NAR has been abysmal at forecasting. I am no better.
Note the disparity in forecasts in just 10 months, a change in 800,000 units for this year.
"Existing-home sales, after reaching the third highest total on record, 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million next year."
National Association of Realtors, Feb 2007.
Existing-home sales are likely to total 5.67 million this year, the fifth highest on record, rising to 5.70 million in 2008, in contrast with 6.48 million in 2006.
NAR, Dec 2007
Posted by: ex SF-er at December 10, 2007 12:53 PM
NAR = Not (so) Accurate Reporting
They'll be calling a bottom next quarter, next year, and probably in 2009 as well.
Posted by: gh at December 10, 2007 12:54 PM
Calculated Risk (blog) has done a good job of forecasting this year. They haven't done a forecast yet for 2008, but there's a writeup on that blog suggesting that 2008 (and years following) will likely see existing home sales fall below 4 million.
Sounds about right, IMO.
Posted by: Satchel at December 10, 2007 2:05 PM
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