"Pending Sales" == "The check is in the mail." When Realtors® start paying income taxes on their pendings rather than their closings I'll start paying attention to pendings. - Posted by: Rob Dawg | Jun 9, 2008 11:28:22 AM (on The Big Picture)Good to see the WSJ is on the job:
The National Association of Realtors is trumpeting a fourth consecutive monthly gain in their report of pending home sales. The index tracks the number of contracts signed on homes, which increased in May by just 0.1% from the previous month. Pending sales are up 6.7% from a year ago.[emphasis added]
In the past those contracts would give a pretty good indication of what existing home sales would look like when the NAR reports its May numbers a few weeks later. These days the report’s reliability as an indicator is shakier. More pending sales appear to be falling through, as financing becomes harder to reach or as buyers and sellers renege on pricing.
In April, for example, contracts signed on homes rose 6.7% from the previous month, but existing home sales in May—when a lot of those contracts should have closed and been reported—increased by just 2.4%. Indeed, for nearly a year, the pending home-sales index appears to be over-predicting closed sales relative to historical levels, notes independent housing economist Thomas Lawler.
6 comments:
Let me be first to say that this is an elemental concept, but so many people are not capable of parsing the spin.
Kinda like when someone says that 19 out of 20 cities in the Case-Shiller are improving in price, when they mean that the numbers were not as negative in as in the prior period.
Pending sales, signed contracts -- ha! Rubbish!
I just had some friends who were crowing that they'd sold their (overpriced, oversized) house in the exurbs for pretty close to their asking price. Best of all, it was enough to cover the second AND THIRD mortgages they have on the house. Amazing. Deal done just a week after listing it.
Then comes the evil appraiser. He was not even close. His appraisal came in low by about $100k, which would put them underwater trying to get rid of the thing, especially after the sales commission. The buyer "loves the house", but no way is the buyer able (or willing) to put up the extra money to get normal LTV.
Signed contract, sale pending, but... no sale. This process will be repeated a million times over this year.
I have seen a vast improvement in prices. After all I am a renter not a homemoaner.
Rob,
I watched Mecum's Corvette auction on HDNET this weekend. There were a whole lot of no sales. I want to see it again but Dana Mecum mentioned a sale rate of 55-60%. I think that is really optomistic. A couple of no reserve cars sold for prices that the commentators couldn't believe. I can say with all honesty that prices are off a easy 50%.
Yep,the easy money has left the musclecar guys and we are getting back to a rational cash market...
Chris
The NAR should hire Casey as a spokesperson -- a first-rate sociopath leading a group devoted to outright lies.
There was that Harley Earl personal custom that went for some gawd awful price but you are correct. It is exactly like the early housing market. Wishing prices, stubborn sellers, fewer buyers. The bottom end has fallen out. Pitty the slightly modified Chevelle SS or Duster owner. Replitoys are totally screwed.
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