Thursday, July 06, 2006

May Pending Home Sales Down 10.1% YOY

From the National Association of Realtors:

Pending Home Sales Index Leveling Out

The index of pending home sales, a leading gauge for the housing sector, rose slightly in May, an indication that the market is stabilizing, according to the National Association of Realtors®.

The Pending Home Sales Index,* based on contracts signed in May, was up 1.3 percent to a level of 113.4 from an index of 111.9 in April, but was 10.1 percent lower than May 2005.

The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within a month or two of signing.
Regionally, the PHSI in the South was down) 1.7 percent in May and was 7.3 percent lower than May 2005. In the Northeast, the index was down 0.6 percent in May and was 7.8 percent below a year ago. The index in the Midwest was up 0.6 percent to 100.9 in May but was 13.6 percent lower than May 2005. The index in the West rose 9.9 percent to 110.1 in May but was 12.9 percent below a year earlier.

May Pending Home Sales Index(PDF)

Since there is quite a bit of data contained in these reports, I think a graph is useful to help illustrate the trend as well as the typical seasonal patterns. I've gone ahead and graphed the unadjusted pending home sales for the Northeast region from 2001 to 2006:

Caveat Emptor!


Anonymous Anonymous said...

Problem, what problem.

7/06/2006 11:31:00 AM  
Blogger NJGal said...

So the Midwest and the West carry the day, with sales still falling in the Northeast. And funny, it seems to me like more places sold recently than in prior months. Guess it's just not enough.

7/06/2006 11:32:00 AM  
Anonymous Anonymous said...

The marketplace is adjusting?

No problem.

All systems go.

7/06/2006 11:37:00 AM  
Blogger RichInNorthNJ said...

rose slightly in May, an indication that the market is stabilizing, according to the National Association of Realtors®.

I would have been shocked if May dropped a large percentage over April. May is the peak month for the "selling/Buying Season".
And I actually would have thought that the NE would have been higher, not flat.
But stabilizing? No. Continuing the downward trend? Yes.

7/06/2006 11:42:00 AM  
Blogger skep-tic said...

if may is traditionally the peak, then it should be all downhill from here.

I'm more and more amazed that realtors continue to try to spin the data positively. they are just fueling sellers' denial

7/06/2006 11:51:00 AM  
Anonymous Anonymous said...

saw an old property in glacier road in parsippany, 3 bed and 1 bath, no garage, no family room or dinning room. Seller is asking for 399K and I am offering 160K. Guys, wake the greedy sellers up to the reality by offering "normal" price!

7/06/2006 11:59:00 AM  
Blogger grim said...

You can get an idea of the "peak" by looking at the non seasonally adjusted numbers.

You can get a better idea by scanning through the spreadsheet version of the data:



7/06/2006 12:06:00 PM  
Anonymous Anonymous said...

Just saw a price adjustment on
a condo in monmouth county.

marked down about 50k since last

7/06/2006 12:09:00 PM  
Blogger RichInNorthNJ said...

Thanks Grim.

Looks as if June is usually the "peak" month followed by May.
This may be why we saw the inventory numbers go flat at the beginning of July?

Do you know what the SAFs tab is?

7/06/2006 12:21:00 PM  
Blogger grim said...


I'll post a graph up for the Northeast Unadjusted from 2001-2006

Just gimme one sec. to graph it up..


7/06/2006 12:24:00 PM  
Blogger grim said...


My guess is the SAF tab represents their seasonal adjustments.

Here is the graph, also posted on the main page..

Northeast Pending Home Sales


7/06/2006 12:31:00 PM  
Anonymous UnRealtor said...

Realtor-speak: 10% decline = "leveling out"

7/06/2006 12:33:00 PM  
Anonymous Anonymous said...

Can anyone estimate what, if any, the discount should be on the following home vs. same home, different location?

Beautiful, traditional home nestled on 1.3 acres along a country-like road, remodeled throughout, with floor-to-ceiling stone fireplace. [house is just across from a huge trailer park.]

Sorry for any inferences here..I'm simply interested in home value and equity retention..nothing else.

7/06/2006 12:33:00 PM  
Blogger chicagofinance said...

I think the numbers don't look so bad. Maybe I'm in the minority.

Bear in mind as Grim points out in "Price Reduced" and "Lowball", even when this grand standoff between buyers and sellers is resolved, there will be a flurry of deals, albeit at flat YOY or up to 10% discounts. However, in reality, it is a "head fake".

The real story is not going to play out over the next 6-12 months, but rather the next 12-48 months.

The biggest problem with our daily review of topics is that we tend to lose perspective. This endeavor is a marathon.

Read the data with an open mind. Don't bring a biased view or you will potentially overlook important nuances.


7/06/2006 12:50:00 PM  
Blogger delford said...

chicagofinance: I agree, with most fo what you say, but do no think it will be 12 to 48 months as you believe.

I think you might be basing that belief on the last down turn, and while it could play out the same way, I do not think so.

The biggest differences between now and then, the sub-prime borrower, and toxic financings, in addition people back then as far as down apyments, the norm was 20%, not 0 down, as so many have done over the last few years. In other words the risk is far greater this time and as such it is my belief that the out come will be far quicker and nastier this time.

I think it is palying out now, and will continue to play out over the next year. The time froam in my opinion is not going to be as long as you think, but rather far swifter and mcuh more violent.

7/06/2006 01:39:00 PM  
Anonymous UnRealtor said...

Suzanne never mentioned "swift and violent."

7/06/2006 01:41:00 PM  
Blogger RichInNorthNJ said...


Thanks for the chart and info.


Excellent points.

I've learned quite a bit from the two of you.

Thanks again, Rich

7/06/2006 01:41:00 PM  
Blogger chicagofinance said...


The financial strategist and tactician in me is licking his chops at what you are saying.

My heart aches at the thought.

I hope what you say won't happen.

Heaven help NJ if it does.

7/06/2006 01:59:00 PM  
Blogger skep-tic said...

why do you think a swift fall will be worse? I would think that a slow grind to the bottom a la Japan would be worse

7/06/2006 02:19:00 PM  
Anonymous Anonymous said...

yeah shytown, those are some great points.

I was driving in Summit today. Anyone know what the story is about those townhouses they are building on or near Morris Ave and near some park. I think the park is called Bryant Park?

They look awfully nice, on nice land, in a clean town, close to a park. If this market wasn't so damned overvalued, I would tell some people to check it out.

Anyone got the skinny on the minny?

7/06/2006 02:20:00 PM  
Anonymous Anonymous said...

yeah shytown, those are some great points.

I was driving in Summit today. Anyone know what the story is about those townhouses they are building on or near Morris Ave and near some park. I think the park is called Bryant Park?

They look awfully nice, on nice land, in a clean town, close to a park. If this market wasn't so damned overvalued, I would tell some people to check it out.

Anyone got the skinny on the minny?

7/06/2006 02:20:00 PM  
Blogger BergenBuyer said...

"The slight change in pending home sales indicates the market is beginning to level out," said David Lereah, chief economist for the real estate trade group. "This is consistent with our forecast, which is showing a soft landing for the housing sector."

David Lereah forgot to mention May/June as peak months and even in the worst declining market May is probably always higher than April. These numbers are also being positively affected by buyers that were/are oblivious to the market change. Think back to March/April, people still went to open houses, now there's no one. Buyers have wisened up.

7/06/2006 02:21:00 PM  
Anonymous Anonymous said...

Hey is it true?

The police in NJ were working without pay during the last few days because of the shutdown.

That better not be true. That god damn Corzine, I'd like to give him one across the lips.


7/06/2006 02:25:00 PM  
Blogger Richie said...

This is why you can't trust the media:

USA Today:

Mortgage demand rises as rates dip despite Fed increase


Mortgage rates edge up for fourth straight week

One says the rates go down, the other says they go up.

Both articles dated today.


7/06/2006 02:36:00 PM  
Blogger chaoticchild said...

SAS - Nice Summmit Townhouse,

Those nice townhoused are actually located in Springfield. One side of Briant park is Summit, the other side is Springfield.

THere are some 10 year young townhoused on the Summit side with indirect view to the park. They are about 575k for a 2 bedroom townhouse. here is the link to the listing. The listing says 3 bedroom, it is actually 2 bed + attic.


7/06/2006 02:38:00 PM  
Anonymous Anonymous said...

skep-tic - you are right about the realtors misleading the sellers. It is crazy that they are wasting time and money advertising a house that is blatantly overpriced. It just goes to show how greedy and ignorant they truly are.

7/06/2006 02:43:00 PM  
Anonymous UnRealtor said...

RE: Summit condo

To me, condos will always be a glorified apartment.

I'd never pay half a million to live in an apartment.

7/06/2006 02:50:00 PM  
Blogger RichInNorthNJ said...


That's because one is citing Freddie Mac and the other is citing the Mortgage Bankers Assn.

U.S. mortgage rates stay put

But what you point out is just another good reason why it's a good idea to heed Chicago's words.
Realize it's like a turning ship.
Slooow but powerful.
I myself keep forgetting the part about it being slow.

7/06/2006 02:54:00 PM  
Anonymous Anonymous said...


Thanks, but I think we are talking about 2 different developments. There is the one that you speak of...but near the Celgene Corporation, there are some going up...nail to we speak.
You have input on those?


7/06/2006 02:54:00 PM  
Anonymous Anonymous said...

The Housing market is DEAD!

It's like stale humid air at 98 degrees.

The money grubbing sellers who do NOT have to sell are pulling and waiting for things to get better!!!


Maybe these Greedy grubbers should pull out a stock chart of MSFT CSCO KO and see how long and how far things can really drop.






7/06/2006 02:58:00 PM  
Anonymous Anonymous said...

Regret regret regret coming your way GRUBBERS!

Shoulda coulda woulda but it will be too late. Your stuck for many years grubbers holding for it to hit your greedy grubbing asking prices.



7/06/2006 03:00:00 PM  
Anonymous Anonymous said...

Bid 25%-30%less.

Make'em Miserable!

Tell'em you are not going to be their debt slave while they live it up in comfort.




7/06/2006 03:05:00 PM  
Blogger chaoticchild said...


I don't know the development by Celgene Corp. However I know that area is not the "nice" part of Summit, it is very working class. It is also populated by Mexicans. The elementary school (Jefferson) there is not very good.

Most of the newer townhouses (less 20 yrs young) in that area go from 600k - 800k. I think it is insane considering the area and school. But it is Summit, sellers can list whatever they want to list.



7/06/2006 03:11:00 PM  
Blogger grim said...

Heads up folks, I just got my hands on the June sales data for North Jersey.

I need to run some more numbers to confirm this, but the preliminary data shows June sales tracking approximately 20% below last year.

Like I said, these numbers should be taken with a grain of salt.


7/06/2006 03:26:00 PM  
Anonymous Anonymous said...


Mmmm...very interesting. I didn't know there were alot of mexicans in Summit. How the hell they afford it? I know of a guy who runs mexicans through there. Alot of times if you see those guys standing around, they are waiting for someone to drive by and pick them up for work, that site is usually in Summit (alot of rich want there lawns pedicured ya know), so that maybe what you are seeing. Construction sites pick up the Mexicans too, under the table. These construction foremen are not going to pay union wage, nor do union members want to hurt their backs, so they get the Mexicans.

Its a crying shame. I think I am one of the very few who like the mexicans. I always pay those guys above fair wage. They work there tails off and look for work.....unlike the ones who just stay in the same location and collect the DOL, generation after generation i.e Newark, Camden, Paterson.

I am going off on a tangent, I know these boys on here don't like tangents. It gets there you know what in a bundle....he he...

Thanks again CC.


7/06/2006 03:32:00 PM  
Anonymous Anonymous said...

why there is no otteau report for Q2 of 2006...or is it too early for that.

7/06/2006 03:43:00 PM  
Blogger chicagofinance said...

I am going off on a tangent, I know these boys on here don't like tangents. It gets there you know what in a bundle....he he...
Thanks again CC.
7/06/2006 04:32:24 PM


7/06/2006 04:02:00 PM  
Blogger grim said...

Too early for the Otteau Q2 numbers.


7/06/2006 04:03:00 PM  
Blogger RichInNorthNJ said...

Bergen County - NJMLS

Line 1: SFH, 2-4 Family, Condo/Co-Op/TwnHse
Line 2: Single Family Home Only

#Sold - #Under Contract

June 2006
1004 - 1006
644 - 656
June 2005
1302 - 1319
841 - 865
June 2004
1276 - 1245
863 - 818
June 2003
1021 - 1222
666 - 824
June 2002
1002 - 978
691 - 653
June 2001
1011 - 1045
717 - 724
June 2000
1100 - 1019
766 - 666

Now if only the Avg. and Median Price would drop as much...

7/06/2006 04:09:00 PM  
Blogger skep-tic said...

looks like a bloodbath.

again, I say swiftly to the bottom is best for all but the fools who bought during the last 2 yrs

7/06/2006 04:27:00 PM  
Blogger grim said...


Those numbers look in-line with what I'm seeing on GSMLS. Thanks for the confirmation.


7/06/2006 04:41:00 PM  
Blogger grim said...

Came across these last night, from NJMLS:

2006 Q2 SFH Sales

2006 Q2 Condo Sales

Should give readers a good look at the differential between asking and sales prices currently..


7/06/2006 05:03:00 PM  
Anonymous UnRealtor said...

"Should give readers a good look at the differential between asking and sales prices currently."

The scum realtors still hide the price history, as the "original" asking price is often quite a bit higher than the prices listed in their sales reports.

Add in shady re-listings with a different MLS # for price drops, etc.

Realtors like to hype properties "sold for 98% of asking price!" when in fact they did not.

The buyer is left to fend for themselves, manually tracking all kinds of data to avoid getting screwed by realtors.

7/06/2006 05:19:00 PM  
Anonymous Anonymous said...

If I had the time I'd go get my RE license just to post the facts (original asking prices/ sales prices/ days on market, etc.) There has got to be a way to find out these facts so that realtors can't lie and hide the truth. It is so unethical.


7/06/2006 05:27:00 PM  
Blogger grim said...

But.. Isn't that what I'm doing?


7/06/2006 06:04:00 PM  
Blogger RichInNorthNJ said...

...hide the price history, as the "original" asking price is often quite a bit higher than the prices listed in their sales reports.

Add in shady re-listings with a different MLS # for price drops, etc.

I did a quick check and the original price matches up.
But only for the last listing. As you say in your 2nd paragraph, if the house is re-listed (due to expiration or re-listing for price change) than that becomes the new "original" price.

But the point is, if you are interested in purchasing in that area, you now have up-to-date sold price information to monitor or use for comparison.
And it's much better than the "friends' uncle heard" data because it's data and not blind opinion.

7/06/2006 06:10:00 PM  
Blogger RichInNorthNJ said...

"What we have here is failure to communicate."

Actually, I think it’s a really big reading comprehension problem.

7/06/2006 06:13:00 PM  
Anonymous Anonymous said...

grim - I guess you are :) You are doing a great job with this blog, thank you!
It still seems that there is so much info. that is not getting out or at least needs to be made more public. Everyday I hear people tell me, "this area is different" and they still believe that housing prices are stable. I forward this blog to them, but they are in denial. The media is very selective with what it publishes as fact and it is frustrating as hell.


7/06/2006 06:15:00 PM  
Anonymous Anonymous said...

No area NJ is immune from the bubble, some areas will weather storm a bit better, but all in all, she is a sinking ship.

Its like parents and their kids.
Everyone thinks there own kid is great and special. But they ain't.

Same concept applys to people and their houses and towns.
"oh not this area, we stand out, its special" blah, blah, blah

People like to think just because they are somewhat connected, it therefore had to be different, special.


7/06/2006 06:26:00 PM  
Anonymous Anonymous said...

realtors, a profession as whole, are totally corrupted and untrustworthy. It is rotten in the core! It is their culture! It almost makes me vomit when I heard their self-promoting ad on the radion claiming they are "honest" and "ethical". I intend to ignore what realtors said or reported. They can't spin whatever the way they want. I am not the audience.

When I make any offer, I usually offer 50-60% below the asking price. Guys, you should do the same.

7/06/2006 07:08:00 PM  
Anonymous Anonymous said...

Everyone thinks there own kid is great and special. But they ain't.

realtors, a profession as whole, are totally corrupted and untrustworthy. It is rotten in the core! It is their culture!

I dispute both those points !

7/06/2006 08:00:00 PM  
Blogger RichInNorthNJ said...

I second that.

7/06/2006 08:22:00 PM  
Anonymous Anonymous said...


The psychology is all the same.

"not my Johnny" "not my house" "not this town"
"we are different"


Most (not all) people think they are above the other guy, its this thinking that always catches people off guard and makes bubbles bigger when they happen and hurt worse when they pop.
Economics is nothing but human behavior, and the older you get, the easier it is to predict human behavior and hence markets.
Remember...majority of people do the wrong thing at the wrong time.

Regarding the real estate agent post, I can see were the blogger is coming from...Bottom line with sales (RE agent is a fancy name for a sales person) most will say whatever to make that sale. Its just apart of the game, does it make the salesman trash, no....its just the game. Some people just don't understand the game or may have had a bad experience, so they lash out with negativity.

In my sales days, I would say anything to make that sale, I would blow smoke up anyones skirt.
I was selling ice cubes to eskimos.
RE people are no different.

But the money has gotten so big in RE, the temptation to be unethical is great.


7/06/2006 08:25:00 PM  
Anonymous Anonymous said...

Just wondering?

To become a RE agent, do they do a credit check and background check on those people?


7/06/2006 08:32:00 PM  
Blogger grim said...

New Jersey Real Estate Commission

7/06/2006 08:40:00 PM  
Blogger grim said...

There are a good handful of agents that are active participants of this site, whether they post public comments, or communicate to me via email.

Combine a low barrier of entry to the profession with a real estate boom and who do you think the average agent will be? Someone looking for a quick buck.

Don't carry that stereotype to all real estate professionals (agents, appraisers, etc), because it just isn't the case.


7/06/2006 08:46:00 PM  
Anonymous Anonymous said...

My kids are total pains in the butt! I love them, but I know their faults.
I do know the type you are referring to though. Those poor kids will need therapy for years!

As for the housing market - people that are just jumping in now and trying to sell after they have missed the boom, are pathetic and getting quite annoying.

If my home, or my child was obscene, offensive or unclean, I'd put them in therapy, sanitize them and make sure they could stand on their own.
Sellers and their delusional realtors are like bad parents. They think their "baby" houses are the greatest. Maybe they should get them into an intervention/ detox program a.s.a.p. before sending them into the real world.

7/06/2006 08:55:00 PM  
Anonymous UnRealtor said...

Just wanted to clarify, this blog does a great service.

I have read many of our resident realtor KL's posts, and she is obviously a decent, honest person.

But her industry is polluted and unethical, right up to the NAR leadership (e.g., David Liarah).

When you compare the TV commercial lies "Only a Realtor can help you navigate buying a home, and we're bound by a strict code of ethics," against what a great many realtors actually do (e.g., changing the MLS # for a price drop), things don't line up.

Anyone who simply watches a zip code for a few months will observe this shady realtor behavior.

Many realtors are probably honest, but they operate within a dishonest framework created by the NAR.

7/06/2006 09:04:00 PM  
Anonymous Anonymous said...

Many realtors are probably honest, but they operate within a dishonest framework created by the NAR.

Okay but really I have great kids ! (-:

7/06/2006 09:14:00 PM  
Blogger chicagofinance said...

My wife's uncle and cousin [uncle's son] run their own realtor business. They are straight shooting and no nonsense people. They can be a little rigid, but the flip side is that they are very dispassionate and they have seen it all. The may not be the rule, but I have a hard time believing that they are stark exceptions.

7/06/2006 09:16:00 PM  
Anonymous Anonymous said...

anon 09:55,

I hear ya barking.

People expect things to be automatic these days, they want everything to be easy as pushing a button.

I want to be CEO or manager now, forget being Ray Ray in the mailman for awhile and working your way up the latter (btw-if you wanna move up in the work world, you better learn to kiss ass, your boss likes ping pong, you become a damn ping pong table)

I want a burger now...forget that a good burger takes more than 60 seconds in a McDonalds microwave.

By golly, if I bought a house, I am going to sell it and make big profit, because I want that quick easy money now.

Let me tell ya, money ain't quick, and it ain't easy. Its a process. Yes, somepeople are lucky and find that golden market timing. But in my experience, if money is quick and easy, you better watch out...because something bad is coming your way.

Not the best way to describe, but ya get my drift.


7/06/2006 09:21:00 PM  
Anonymous Anonymous said...

I agree with unrealtor -
I have dealt with a real estate agency (I wish I could print the name)! They state how ethical and honest, etc. they are on their web site. If they have to say it - obviously their reputation is already questionable...I know they are snakes, like I said, I have dealt with them. They lie straight to your face and laugh all the way to the bank.. ("making waves").
For the honest realtors out their - it is up to you to fight this battle too. Be honest, don't fall into spinning the facts and greed. There will always be houses to buy and sell, but you only have one reputation - make a good 1st impression.

7/06/2006 09:28:00 PM  
Anonymous Anonymous said...

Trust no one, and stop complaining about middlemen if you don't want to do the time. At least if you lose money, it will be your own doing!

Grand total time on real estate reading/researching/etc. over the last few years tops hundreds of hours for me. When I go see a house, I tell THEM what they paid for the thing ON WHAT DATE.

Drop a half million on a home? I might at least spend the same amount of time as I did on a lousy thesis.

Parents drop 100k to put their kids through college for $35k starting salaries, but then go and hire some former (sorry) perfume chick on their biggest purchase.

I've said before, I do everything the hard way, but never blame anyone but myself.


7/06/2006 09:48:00 PM  
Anonymous Anonymous said...

7/06/2006 09:56:00 PM  
Anonymous Anonymous said...

NEW YORK (Reuters) - Cancellation rates among U.S. home buyers are running above last quarter's levels as the housing market slows, the chief executive of luxury home builder Toll Brothers Inc. (TOL.N: Quote, Profile, Research) said on Tuesday.

"I think our cancellations are running higher than on the last call," Robert Toll said at the Reuters Real Estate Summit in New York.

Toll cited a perception among buyers, fueled partly by media coverage of the housing market, that homes are a depreciating asset. He also pointed to the supply of "speculative housing" as well as a national "malaise" caused by last autumn's hurricanes.

But he predicted buyers who sit out the current industry slowdown will regret their decision later, and said cancellation rates were likely to stabilize over the next six months.

"I think you're going to see a very strong housing market again," Toll said.

The extent of speculative buying has made a big difference in whether a region is a "B" market or a "D for dog" market, Toll said. In areas like Washington and Northern Virginia, a retreat by speculators has pressured sales.

"It's a double whammy," Toll said. "You've lost the demand and you've picked up extra supply." He estimated speculators -- who buy homes as investments and never live in them -- accounted for as much as 10 percent of markets such as that for Delaware coastal properties.

Toll also said sales in Northern California were still "pretty good" though nowhere near their peak of recent years when demand was "feverish." He said the Connecticut market has slowed from as recently as a month ago, but pointed to continued strength in Arizona and Colorado

**not sure if this was posted alraedy.
I think Toll is smoking that whackey teebackey.


7/06/2006 10:17:00 PM  
Anonymous Anonymous said...

13% price drop confirmation Piscataway (Middlesex)

2 bedroom townhouse

267K 11/2004

329K 12/05

287K 05/06

7/06/2006 11:28:00 PM  
Anonymous Anonymous said...

of all the so called "honest" realtors I dealt with, 9 out of 10 will lie to close the deals! You feel they thought you are an idiot! I think we should persecute realtors and send 90% of them to Jail!

7/06/2006 11:39:00 PM  
Anonymous Anonymous said...

Anon 9:25pm said...
"Remember...majority of people do the wrong thing at the wrong time."

That's the whole ball game folks! There are some shrewdy's on this board.
Only point I would like to add is the sage remember that markets can sometimes stay irrational longer than you can stay liquid. (for those who play the short side) If feeling cramped in an apartment with a baby on the way, nesting Mama busting your b$#@s ? Rent yourself a nice house and wait it out.

7/07/2006 01:53:00 AM  

Post a Comment

<< Home