Saturday, July 28, 2012

Pending Home Sales Report By NAR Is A Bad Joke


by Joe Manausa, MBA Century 21 Manausa and Associates Tallahassee, Florida, www.manausa.com, wrote this for Tallahassee.com

Pending Home Sales Report By NAR Is A Bad Joke


I have to admit it, the only reason that I read the monthly Pending Home Sales Index published by NAR is to see how they will spin the housing data into something positive for the housing market.


Imagine my “lack of shock” this month when I saw the positive report regarding 14 consecutive months of year-over-year gains in the pending home Sales Index. Of course, my memory reminded me that we continue to revise past numbers down so that current numbers appear higher.

If you would like to see the latest pending home Sales Index spin by the National Association of REALTORS, you are welcome to wade through it. However, if you would like an overview, infused with some funny quotes by famous people, then simply proceed below.

Is NARs Pending Home Sales Index Pure Fiction?
“Fiction writing is great, you can make up almost anything.” – Ivana Trump, on finishing her first novel

I think that Lawrence Yun and his staff mistakenly feel that they have a story to tell. It is a story of the importance of home ownership and why things are always “looking up” for homeowners.

His job title might say “Chief Economist” but his job description is purely about marketing.

Tell the people that “now is the time to buy,” and support it with a spin on numbers.

14 Positive Pending Home Sales Indexes In A Row!
“Those who survived the San Francisco earthquake said, “Thank God, I’m still alive.” But, of course, those who died, their lives will never be the same again.” – Barbara Boxer, Senator

This month’s pending home Sales Index represents 14 in a row with year-over-year gains. Yeah!

Perhaps NAR hopes that those of us that are not just “one time readers” will forget their big news story a few months ago.

Do you remember? It’s the one where NAR admitted to “overstating” the numbers for several years, so they decided to go back and revise them downward. Sort of like “coming clean,” right?

Actually, they did it so that “the past” could be worse than “the present.” I wonder if NAR had not revised the previous reports downward if they could report 14 positive pending home Sales Indexs in a row today. Hmmmm.

No Really, The Pending Home Sales Index Is All Good News!
“If you take out the killings, Washington actually has a very low crime rate.” – Marion Barry, mayor of Washington, D.C.

In his recent report on existing home sales, Lawrence Yun pointed out that the inventory of homes for sale is around 6.6 months of supply. Most real estate experts would say that this level is consistent with a buyer’s market, just above market equilibrium. So in simple terms, there are still too many homes for sale for the current level of demand in the US.

But now just a few days later, in the newly released Pending Home Sales Index, Dr. Yun claims that inventory shortages are a factor, and then even goes on to report that “housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”

I don’t even know how to respond to such a reckless statement.

The Pending Home Sales Index Suggests Strong 2013
“We didn’t underestimate them. They were just a lot better than we thought” – Bobby Robson, after the 1990 World Cup Final match against Cameroon

If you had the stomach to pull-up the past six years worth of unrevised Pending Home Sales Index published by the NAR, you would find that this once respected organization no longer carries much credibility.

There is a lack of leadership and a lack of credibility that will take a long time to recover at NAR.

It has lied, spun, twisted, and tried to shape the housing industry. And it has failed. The market seems to move forward unaffected by the efforts of deception we continually see in the monthly Pending Home Sales Index.

I hope that NAR will understand that they are wasting our money with this charade, and I wish they would focus on reality so that the NAR could step forward and help solve the real problems in the housing market.

It is my belief that if REALTORS would get rowdy and loud enough on outing our NAR’s tactics of puffery and falsification, we might eventually affect a change in the market and certainly in how the Pending Home Sales Index is delivered each month.

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