Pending Home Sales

So the headline wasn’t great: sales down month over month.  National Association of Realtors economist, Lawrence Yun hung the blame on tight lending standards and lack of confidence, both of which are true.  If that’s all you read or heard, you’d conclude this market stinks.  But I actually looked at the Pending Home Sales Index (PHSI) chart NAR put out and I was surprised at what I found.

Obviously as a real estate agent in California I am specifically focused on the West numbers and those numbers were surprisingly strong.  For example, August was the 3rd highest pending sales number in the past 12 months; that’s not bad.  Moreover, it was up 8.4% Seasonally Adjusted (SA) year over year; that’s not bad either. More incredibly, it was the highest August in the past 4 years, save for 2009 which was in the middle of the Federal Tax Credit.  And for the real kicker, the Non Seasonally Adjusted (NSA) number was a whopping 28% over last month.  Nationally, that number is 9.4%.  These numbers are nothing short of astounding.

I’m always curious about how easily numbers can be manipulated.  When we look at inflation we are supposed to exclude the “volatile costs of food and energy”.  I don’t think anyone but economists exclude food and energy in considering inflation.  I know it factors into my monthly expenses.  Thus when I looked at the Pending numbers yesterday, I considered the NSA numbers.  It’s raw data.  Just a total pending sales; no looking at what month it is; is it the selling season etc., etc…  So when I saw the West’s rise of 28%, I fell out of my chair – that’s an insane number.  That’s such a big number it blows my mind to think about it.  28%??

What that suggests to me is that in spite of what everyone is saying, including NAR, there is activity in this market and homes are selling.  Sure prices are down, and many sellers are under water, but someone is buying.  Numbers can be manipulated for sure, but in the end, numbers don’t lie.

About Tim Freund

Tim Freund has been a licensed real estate agent/broker since 1990. He spent 14 years as a new home sales rep, ran his own boutique resale brokerage for 5 years and is currently a Senior Estates Director for Dilbeck Real Estate/Christie's International Estates in Westlake Village, Ca. Tim is a Certified Residential Specialist (CRS), an Accredited Buyer's Representative (ABR), a Corporate Mobilty Specialist (CMS) and a Senior Real Estate Specialist (SRES). Tim has successfully negotiated a loan modification for a client and is a professional short sale negotiator. Tim has been married 26 years, has 2 children and has been a resident of the Conejo Valley since 1991.
This entry was posted in Economics, Real Estate and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to Pending Home Sales

  1. Oliver says:

    I believe there is a decent number of foreign investors buying real estate these days. I personally know people from India, the Czech Republic and Pakistan that have come to the US since the ‘Great Recession’ in order to invest in real estate, and I’m sure that’s not limited to my area (central Florida). With the sheer amount of existing homes for sale that are underwater, not to mention all the foreclosed properties out there, it makes sense.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s