July Pending Home Sales Fall 16% YOY
From Marketwatch:
Pending homes sales index falls 7% in July
From the National Association of Realtors:
Pending Home Sales Index Points To Easing Market
Pending homes sales index falls 7% in July
An index of pending home sales fell 7% in July to lowest level since February 2003, the National Association of Realtors reported Friday.
The index is down 16% in the past 12 months. Every other housing indicator shows a similar decline in the past year.
"The index shows existing-home sales should continue to ease after a stronger-than-expected decline in July, but are likely to flatten in the months ahead," said David Lereah, chief economist for the realtors.
In July, the pending home sales index fell 9% in the Midwest, 7.7% in the Northeast, 6.4% in the South and 5.5% in the West.
In the past year, the pending home sales index is down 20.3% in the West, 20.1% in the Midwest, 15.5% in the Northeast and 11.3% in the South.
The index tracks signed contracts for sales of existing homes. The realtors report sales in a separate report at the closing.
"Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy," Lereah said in a statement. "Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail."
From the National Association of Realtors:
Pending Home Sales Index Points To Easing Market
Home sales should be leveling out in the months ahead at a lower pace, according to an index based on pending home sales, a leading indicator for the housing market published by the National Association of Realtors®.
The Pending Home Sales Index,* based on contracts signed in July, is down 7.0 percent to a level of 105.6 from a downwardly revised reading of 113.5 in June, and is 16.0 percent lower than July 2005.
...
Lereah said psychological factors account for much of the decline in July home sales. “We’ve never seen a general decline in the housing market against a healthy economic backdrop where jobs are being created, the economy in growing and interest rates are favorable,” he said. “Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.”
...
Regionally, the PHSI in the West declined 5.5 percent in July to 103.1 and was 20.3 percent below July 2005. The index in the South dropped 6.4 percent to 122.3 in July and was 11.3 percent below a year ago. In the Northeast, the index fell 7.7 percent in July to 92.1 and was 15.5 percent below July 2005. The index in the Midwest dropped 9.0 percent to 93.3 in July and was 20.1 percent lower than a year ago.
20 Comments:
"Lereah said psychological factors account for much of the decline in July home sales."
Yes, of course, it's just the negative thoughts that are behind plunging sales, it couldn't be affordability, toxic loans, oversupply or massive speculation during the last three years.
I have to give Lereah credit, he's still willing to tailor his remarks to the percentage of the people he can fool all of the time and not worry about the people he can't.
Occassionally though, by mistake or happenstance, he does say something true. I mean this:
"...but in the end we believe that underlying market fundamentals will prevail.”
But, to paraphrase as Indigo Montoya, "you keep using that phrase (word), I'm not sure it means what you think it means."
Actually, I'm pretty sure it doesn't.
Lindsey
From the AP:
Construction Spending Plummets in July
Construction spending plunged by the largest amount in nearly five years, reflecting spreading weakness in the housing industry.
The Commerce Department reported Friday that construction activity dropped to a seasonally adjusted annual rate of $1.20 trillion in July, down 1.2 percent from the June level. It was the biggest one-month decline since a 1.3 percent fall in August 2001, when the country was mired in the last recession.
...
It was the fourth consecutive decline in residential construction and the biggest drop since January 2002, providing dramatic evidence that the nation's five-year housing boom has come to an end. The declines pushed private residential construction down to a seasonally adjusted annual rate of $627.4 billion.
Always amazes me that some people are willing to be such shills. Does being full of $%#% not bother Lereah one bit?
Keep Twisting Mr. Pump.
You can chatter all you want the last of the well financed buyers are NOT LISTENING!
Not many well financed buyers are going to rush in and buy a bloated overpriced house that will depreciate in value by the week month and year.
Lindsey,
Too funny! I think Mr. Lareah needs some iocane powder in the kool-aid that he is drinking.
Oh yeah, price reductions! Market crash! Inconcievable!
And the latest non-farm payroll reports indicate increased job creation in the construction industry. Not a good sign.
OT:
For the $300-jeans set.
An $800 toilet seat...
http://biz.yahoo.com/weekend/loo_1.html
You know, the more I think about it the crazier it is that house saleshave becomesuch an economic indicator. Time was you bought a house and stayed there. It seems to be just another kind of rampant consumerism that the pursuit of bigger & better housing grew to be such a huge part of the economy.
Lereah is just following the NAR "code of ethics."
They approve of his lies to the public.
YOY price drops in Ohio.. From Inman:
Home sales, prices fall in Ohio
Ohio's real estate market continued to cool in July, as home sales fell for the fourth straight month and prices dropped, the Ohio Association of Realtors reported.
Sales of new and existing homes -- including condominiums/co-ops -- reached 12,644 in July, a 9.4 percent decrease from the record 13,949 sales posted during the month a year ago.
The month's average sales price of $160,985 was down 2.8 percent from $165,608 a year ago, and dropped 5.3 percent from $169,925 in June 2006.
"The index shows existing-home sales should continue to ease after a stronger-than-expected decline in July, but are likely to flatten in the months ahead," said David Lereah, chief economist for the realtors.
David,the only thing that is flattening is the homeowners wallet!!!!!
Actually his statements are so ridiculous that it's hilarious, stating that it will "rebound due to underlying market fundamentals."
Boy he is really spinning, pulling straws out of a hat. He sounds like Bob Toll, never seen a market like this in the midst of a good economy and historically low fixed rates. I won't even comment on this. I've skinned that cat up and down and inside and out many times.
David, again if it looks/walks like a duck, it is probably a duck. This damn duck has had its last quack.
BC Bob
"but in the end we believe that underlying market fundamentals will prevail."
-can we be more vague than this people?
{{{"Lereah said psychological factors account for much of the decline in July home sales."
Yes, of course, it's just the negative thoughts that are behind plunging sales, it couldn't be affordability, toxic loans, oversupply or massive speculation during the last three years.}}}
Plus much of the shitty, overpriced, overtrendy housing in the NYC metro area.
What does $300,000 buy you?? Try a 600 square foot one bedroom condo ('Huge & Loft Like are RE terms) in a ghetto nabe, or a studio co-op apartment in the 'outer parts' of the outer boros.. Don't forget about 20% down, outrageous closing costs & board approval.
Plus many of the things that the rest of the country takes for granted are expensive luxuries in the NYC area (except for a closet full of designer clothes)
"David,the only thing that is flattening is the homeowners wallet!!!!!"
-too funny BC Bob
-cs
Overall the price is up un the Second quarter by 1.16%
Since Q2 2005 to Q2 2006 price is up 10% in US. (based on the HPI calculator)
NJ up 12% Q2 2005 to Q2 2006.
this just in....good architect friend in NYC, works in high-end residential and corporate was just laid off. She has put out some feelers, and it sounds like no one in NYC is hiring, and that major cutbacks are happening. Architects are usually the first to feel the r-word.....
Ohh too bad. Hopefully she has six months of savings if she didn't blow all her money on clothes, restaurants, a shrink, the gym & a $3,000 a month apartment...
Hopefully she has enough credit available, because the door to additional credit slams shut & locks tight once one becomes unemployed.
richinnorthnj,
What's with these Bergen County numbers? Are they real? Seems it's the only place still appreciating.
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