Media Gets Pending Home Sales Wrong (Again!)

Thursday, August 07, 2008 | 10:58 AM

There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

-Pending Home Sales Index

>

That's not my definition, that comes straight from the NAR's release. Its the annual changes that matters more.

Not that you would know that reading the spinmeister-in-Chief at the NAR. In what I can only surmise is a foolish attempt at reputation destruction,  Lawrence Yun seems to always emphasize the wrong data. We are left with the assumption that he takes fast track career advice from David Lereah.

Here are the facts: The Pending Home Sales Index is down 12.3% from June 2007 too June 2008. According the the NAR's statement about the PHSI, that is a negative for the next two months. While their press release emphasizes the 5.3% monthly gain in June, we have demonstrated in the past why that amount to little more than the usual seasonality, as families who are moving try to get into the new homes before the new school year starts.

Its one thing for the NAR flacks to spin it, its especially disappointing when the media gets it wrong.

Marketwatch:

In a sign that the U.S. housing market may strengthen in coming months, an index of sales contracts on previously owned U.S. homes rose 5.3% in June from the prior month, the National Association of Realtors reported Thursday.

No, no, no, no, no!

Doesn't anyone else read the footnotes or methodologies ?


UPDATE: August 7, 2008 12:45pm

Mr. Mortgage says its even worse than that:

"Many of the ‘pendings’ are short sales, which will never get approved. As a matter of fact, a study just came out of Santa Clara county, CA showing that between Sept 2007 and the end of March 2008, 2700 short sales were applied for and 77 approved.

How many of today’s ‘pendings’ will never close because the short sale approval does not go through?"



UPDATE2: August 7, 2008 2:41pm

Diana Olick points to this chart (below) from HousingDoom.com, showing the difference between PHSI and actual closings. This very much supports the annual contention discussed above.

Natl_vs_pending_home_sales



>

Previously:
Revisiting Housing Seasonality & the Perennial Bottom Callers  (July 2008) http://bigpicture.typepad.com/comments/2008/07/revisiting-seas.html

Source:
Pending Home Sales Rise, Wider Gains Anticipated as Buyers tap Housing Provisions
NAR, August 07, 2008
http://www.realtor.org/press_room/news_releases/2008/pending_home_sales_rise

Thursday, August 07, 2008 | 10:58 AM | Permalink | Comments (27) | TrackBack (1)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c52a953ef00e553eff2258834

Listed below are links to weblogs that reference Media Gets Pending Home Sales Wrong (Again!):

» Who Doesn't Understand the Pending Home Sales Index? from The Big Picture
Only two groups: The Media and Wall Street economists. I'll make this as simple as possible. (If you are a journalist that covers this area, please read and UNDERSTAND this). The NAR release makes clear (in the footnotes) that the Pending Home Sales In... [Read More]

Tracked on Aug 8, 2008 1:39:11 PM

Comments

This is why we visit your blog (and others), Barry. The MSM long ago lost any shred of credibility they had left.

They're too busy with the bluster and clown suits to "entertain us" to offer up any in-depth analysis about anything.

Thank God for the Internet.

Posted by: Jeff | Aug 7, 2008 11:05:23 AM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner