Then this. On Tuesday, the National Association of Realtors reported that its pending home sales index was up 6.3% nationwide in December fueled by a very strong showing in the South and Midwest. Pending home sales in the South were up 13% from November and 1.6% over 2007. This is good news no matter how you split it. Basically, more homes went under contract in December and are now heading to closing and producing more sales (January existing home sales numbers come out February 25th). More sales mean less inventory which then shifts the supply-demand towards a more healthy balance. But news media could not let some facts get in the way of their established theme for the month. They quickly jumped to qualify this positive showing as “foreclosure driven” and “unsustainable”. From the CNN Money Story:
Sales of homes that were repossessed in foreclosure proceedings contributed significantly to the index’s improvement. Repossessions and short sales, when homes are sold for less than what borrowers owe on their mortgage, now account for more than 30% of all U.S. home sales, according to real estate Web site Zillow.com.
In the end, the numbers are the numbers, so spin shouln’t matter much. But the fact is spin does affect the state of mind of the consumer and keeps them on the sidelines when they would otherwise be in the marketplace taking advantage of the most favorable environment for buying a house in half a century. I say, shut off GloomTube, have a nice evening with your family and go about your business.
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