NAR Says Worst Is Behind Us ... Do You Believe Dr. Yun This Time?

By
Real Estate Agent with Joe Manausa Real Estate 8508880888
https://activerain.com/droplet/y5g

Pending Home Sales IndexWhat can I say, but it's that time of the month again, time for us to review the Pending Home Sales Report from the National Association of REALTORS®.

Historically, this housing report has been a measurement compiled by NAR and then used to proclaim the housing market "stronger than ever," but I suspect the public might be on to the cheer leading efforts of Dr. Yun.

The Pending Home Sales Report is a forward-looking report, as it measures the number of contracts in the MLS, not actual real estate closings. But we know that future sales will likely be a subset of those current contracts.

Based upon what they are seeing at the national level (click here to view the US Pending Home Sales Report), the 2012 has started off so well that Lawrence Yun, Chief Economist for NAR, has reported that 2012 is the first year of the recovery.

Pending Home Sales Report Video

If you watch the video (below) that was included with this month's Pending Home Sales Report, you will find a less than thorough examination of the existing inventory of homes for sale, as well as the shadow inventory of homes.

See how Dr. Yun (in video, looks surprisingly similar to cheer leader above) is able to form his conclusion, based upon some of the facts, to make us confident that the housing market bottom is behind us...

Pending Home Sales Index Video

Pending Home Sales Report Summary

While I would love to see the NAR move to a more modern methodology for the monthly Pending Home Sales Report, there are two larger issues I would love to see addressed by Dr. Yun. His staff is uniquely capable of addressing these at the national level, and I believe we need it now more than we need a 6th straight year of cheer leading.

First, in regards to shadow inventory, what about the homes that "tried to sell and failed" in the past? In Tallahassee, we have roughly 7,000 homes that once tried to sell since the peak of the market, but have not yet sold (and are not currently listed for sale). Shouldn't these be counted among the shadow inventory?

In case you don't memorize our housing numbers :), those 7,000 homes represent more than 2 years worth of sales in the Tallahassee MLS.

Secondly, I wish he would address the growing number of Americans who live in a home that they cannot sell due to fallen prices that have made their home worth less than their mortgage. These "upside down" homeowners represent nearly fifty percent of our historical pool of homebuyers, so it's no shock the market is sputtering.... But I have not heard Dr. Yun or NAR address this growing problem.

The Pending Home Sales Report is a great way to anticipate the future of the housing market, but if we cover-up our findings, we have lost the complete value of the report.

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Rainmaker
522,122
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Yun has delivered the same message since he was hired to cheer lead.  Eventually the market will turn and he will have been right.  Of course, it reminds me of the saying about fool me once, fool me 99 thousand times, or something like that:)

Mar 29, 2012 12:15 AM #1
Rainmaker
524,472
Ralph Janisch ABR CRS Broker
Janisch & Co. - Conroe, TX
Selling Northwest Houston to good people like you!

If Dr. Yun was just a poor old dumb country boy like me he might have a little different take on the economy.  I watch prices and the parking lots of local businesses around where I am along with the shoppers I see.  While I'm optimistic about a recovery I think the Dr. should perhaps be a little more of a pessimist at this particular time.  The sound of crickets is almost deafening.  

Mar 29, 2012 12:23 AM #2
Ambassador
837,516
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

It is interesting I looked at numbers the other day and prices according to the census for 2010 are higher than 2000. IN fact the graph barely moves from its continuing upward growth in prices. What does change is a big Bubble from about 2005-8 that comes crashing down to meet the normal growth graph. So I guess depending on when you bought it determines if you are above or below water

Mar 29, 2012 07:21 AM #3
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

99 Thousand could indeed by right Mike!

Mar 29, 2012 08:20 PM #4
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Jeanne and Ralph. I wonder how much pressure he gets to keep the story positive at all costs.

Mar 29, 2012 08:20 PM #5
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Charlie, my data is more accurate than census data ... our values are higher than 2000, but only the same as 2003 in Tallahassee.

Mar 29, 2012 08:21 PM #6
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Rainmaker
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