Tuesday, March 25, 2008
February Existing Home Sales: A Bloodbath
For some reason, the AP and nearly all major media outlets still swallow the spin from the National Association of Realtors and their spokesperson, comedian Lawrence Yun.
And so we get headlines lauding the "improvement" in February, as sales were up 2.9% from January . . . "The first increase since July!" Further down the page is the other news, that average prices were down 8.2%.
Newsflash: this is a seasonal business. Sales ALWAYS increase from January to February. On top of that, there was an extra day in February this year due to leap year. The increase of 2.9% in February is absolutely meaningless. The real news, which was buried in most articles (presumably, because it was underplayed in the NAR's press release) was that year-over-year, February sales were DOWN 23.8%. There is not a more dishonest group of shills in all the land - the deceit of the NAR borders on criminal fraud.
For a more in depth and sober analysis of the February numbers, see this post and this post at Calculated Risk, the best economics blog in all the tubez. As CR makes clear, February is a relatively unimportant month for housing . . . you'll want to pay close attention to the March numbers when they come out next month. More from The Big Picture. And did I mention that prices are tumbling at record rates as well?
We're not immune here. I'd expect the tone on local real estate to get progressively more sour as 2008 wears on, continuing in 2009.