Those tricky real estate numbers

Northeast sales fell 5.7% and are off 24.1% compared with March 2008.

Looks like this season is shaping up to be a crushing bust for sellers and Realtors. Here are two important points from the article to consider:

#1: “Northeast sales fell 5.7% and are off 24.1% compared with March 2008.”

#2: “Pat Newport, a real estate analyst for IHS Global Insight, is putting less emphasis on pending home sales than he once did for his housing market analyses. There has been a disconnect lately, he said, between the number of properties going into contract (pending home sales) and the number that actually close (existing home sales).
He speculates that this is because buyers are making offers and signing contracts but, because of financing problems, many deals are falling through.”

These are the same points I made in my post yesterday (see below). Seems like I'm not alone in my thinking.

Just wait until these deals close... We will see record price declines.

I can't stand it when someone on the news says "finally some POSITIVE news about housing, the median sales price didn't dip for the first time in 18 months, yadda yadda yadda..."

Sorry, that isn't positive news, unless you already own a house. It's too bad they don't see both sides of the coin. That's typical of the media though.

Here's hoping prices keep on falling...and at the snails pace that they're falling, for the next 12 years anyway.

Northeast sales fell 5.7% and are off 24.1% compared with March 2008.

For the local sales data, the linked NAR sales article says "Northeast sales fell 5.7% and are off 24.1% compared with March 2008".
Whoops! What made you feel better here?

Scott-
You're right about the uptick. I hosted 2 open houses in Natick this past weekend and had a 'full house.'

In fact, one of the homes sold immediately after the Open House within $2k of asking.

Wanting a new home is part human nature, part necessity, and part pragmatism - at least sometimes!

1.6 year over year actually is good data - both for bulls, and in truth, as it isn't just a month over month mis-measure.

But its one data point. It makes sense with low rates (which many buyers think is a good thing, though ironically it isn't for most) and the 8k credit.

But as Bernanke and many others have said (is he a real estate bear?) house prices should continue to fall through 2010, even if the economy picks up (an open question - Bernanke's prediction of such is very hedged and caveated)

At the end of the day, people have to have money to buy houses. Which means jobs and salaries matter. And ratios of salaries to price matter...

The odds of selling a home at an open house is less than 3% and those are NAR statistics. The numbers of people attending open houses is no indication of anything, other than a collection of people who like to look at homes, have nothing better to do on a Sunday, they're nosy and looking for decorating ideas, the neighbors checking out the home they had never seen the inside of before, drive buys who have no clue as to the price so they stop in anyway.
I attended 6 open houses and almost without exception, from what I heard from the realtors was that none of them could either afford the house or they were just kicking the tires and may be in the market next year, as they're afraid prices will keep coming down.
Who wants to buy a house when unemployment will hit 10% and those are NAR stats. It stands to reason to remain calm and see how the market unfolds. Unless it is a first time buyer in the 150K to 300K range, anyone else is taking a major risk.

I don't know, but I thought he explained why the data from March 2008 reflects winter sales rather thing spring sales. Wasn't that the point of the post? So for those who keep repeating that incessantly, seems like you should just re-read his post. Also, he never said there was going to be some huge uptick in prices either. Classically, first sales rebound and then many months or years later, prices rebound. So I don't understand the chip on the shoulder that some of the posters seem to have regarding any even slightly positive observation about what's happening in the market.

#3 John Prescott, Vice President, C21 Commonwealth . Please provide us the address of this home which sold. All of us would like to see the number of days the home had been on the market and the number of price reductions (if any).

By the way, I also wanted to add that I have been out house-shopping with friends who are looking this spring. The open houses have been packed. Two of the houses of the handful we visited sold within almost immediately. So obviously, SOMEONE is out there buying something and many people feel like now is the time to start looking. I am not a realtor and have no vested interest in this observation, but that's what I notice on the street.

These are pending home sales. How many deals are going to fall through?

I feel better about that assessment after seeing Monday’s numbers on pending VCR sales put out by the National Association of VCR Salespeople

Media Spin! Always on the upside here. Where's Fox news when you need it!

I recently read a good article that sums it up best when it comes to the economy, real estate and the stock market:

"For now, the 'bottom' is in -- that is, the bottom of this society's ability to process reality."

Brightonite (#9):

“I don't know, but I thought he explained why the data from March 2008 reflects winter sales rather thing spring sales. Wasn't that the point of the post? So for those who keep repeating that incessantly, seems like you should just re-read his post.”

I'm not sure what the point of Scott's post was, since the data in the article does not in any way support the conclusions he draws. However, to answer your specific question about the data... The March #'s Scott discusses are pending home sales. They are contracts signed in March. Since these contracts will typically close 1-2 months later, these numbers are seen as a forward looking barometer of sales for the months of April and May. In contrast, the “gloomy sales numbers” that came out last week were transactions that closed in March. Those closings (as Scott correctly pointed out) most likely reflect sales agreements signed in the winter.

Brightonite. Unless you are a realtor and can look on MLSPIN.com (the members only realtor database) how do you know if there are houses which magically are selling like hotcakes asap? Are you watching realtors writing offers on the table during the open houses? How do you know if any of these (supposed) sales will close escrow, given the tightening of the credit market?
A few years ago, you could buy a home with nothing down and sometimes a LTV of 125% and a credit score of 620.
Now you often need a LTV of 65% and a credit score in the over 750!
Are you witnessing short sales or foreclosed properties?
Or are you a realtor using this column to stir interest in buying?

"In fact, one of the homes sold immediately after the Open House within $2k of asking."

John,
Justin road or Algonquian? couple of facts you fail to mention; both properties have had large price reductions and recent upgrades , asking price is now far below assessed value. Another neat fact is one of the properties was purchased for almost the same price way back in 2003, before a new high end kitchen and elborate landscaping.......

The NAR has become increasingly desperate to drum any sort of momentum in this ailing spring market. They will continue to say there is heavy attendance at open houses, the media will continue to emphasize the number of homes under contract, the spin machine is on full throttle. The bottom line is NOTHING the NAR or government does can prevent a severely over-priced market from correcting.
Access to low down-payment loans like the FHA program, and federal and in some instance state tax credits, are simple feeble attempts to refuel the bubble
which is collapsing under its own weight. Save your money and don't even think about buying for at least two years.

Hung Wang is 100% correct. Prices in the Boston area are still grossly inflated and will fall at least another 30%. Buyer beware.

Brightonite,
Were some of these "packed" open houses you went to in Brighton? While running several errands last Sundday I happened to stop by one and walk by another several times while running errands and neither were busy.