Thursday, July 1, 2010

Pending Home Sales "A Disaster"

Pending home sales fell a very noticeable 30% in May, according to the National Association of Realtors. 30%!!! The NAR index, which measures signed sales contracts but not closed sales, dropped to 77.6 from 110.9 in April. 

"The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."

Bottom line: The entire recovery signs were manipulated signs of recovery. Pull out the manipulation props (Money supply growth and tax credits for home purchases) and you have Phase 2 of the downturn.

1 comment:

  1. Meaning actual sales will fall even greater as a significant number of signed contracts will fail to close.

    Since 2007 I have been expecting a 40 to 60 percent decline from peak in average residential values in many large markets. This level of decline has already been seen in several such markets. More will soon follow.