NAR sees promise, but hold off on fireworks for now

Pending home sales in the U.S. rose again in November, with the broad trend over the past five months indicating a gradual recovery into 2011, according to the National Association of Realtors (NAR).

The Pending Home Sales Index rose 3.5 percent to 92.2 based on contracts signed in November from 89.1 in October, the NAR said.

The index is 5.0 percent below a reading of 97.0 in November 2009.  The data reflect contracts and not closings, which normally occur with a lag time of one or two months.  (That’s why the NAR mis-characterizes the index as “forward looking.”)  Commented NAR Chief Economist Lawrence Yun:

In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market.  But further gains are needed to reach normal levels of sales activity.

If we add 2 million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume

If, if. . .  If, indeed!

Let’s hope he’s right and expect that he’s not.

I’d rather be pleasantly surprised than depressingly disappointed.  Wouldn’t you?

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

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Two NY Times columnists offer food for thought

Ron Lieber (New York Times photo by Earl Wilson)

Saturday’s New York Times contained two rather provocative columns about housing, one of which surprised me by suggesting that buying now would not be a bad idea for some consumers.

If you haven’t been following my blog, you would expect me to unabashedly trumpet Joe Lieber’s stance in his piece, “In Defense of Home Ownership.” In fact, I do largely agree with him, but I have reservations that he doesn’t express.

Number of signed contracts falls in June

Pending home sales edged down in June, according to the National Association of Realtors (NAR), which forecast near-term sales in the U.S. notably lower than during the months that approached expiration of the homebuyer tax credit.

The Pending Home Sales Index, a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May.  It was 18.6 percent below June 2009. Commented Lawrence Yun, NAR chief economist:

Housing market predictions are all over the lot

Prices, sales, mortgage rates in 2010? No one can know.

Especially at this time of the year, you’ve undoubtedly been taking in predictions of the future of the housing market (and I’ll bet you missed the pun in the headline).

Since the forecasts vary widely and invariably are equivocal, any confusion is understandable, even if the economists themselves often are not.

Quoting CNN Money, Realtor magazine listed these prognostications among many more that are available:

Many experts are hovering around a crystal ball

When it comes to predicting the direction of the housing market, there is no shortage of opinions.  Below you’ll find excerpts from “The Soothsayers” section of my forthcoming e-newsletter,  Realty Digest, which I write every two weeks.  My next newsletter will be issued around noon on Friday, Nov. 4.

Take your pick from the excerpts, draw your own conclusions and forward your comments to this blog:

Thanks to "spratmackrel" for this image

• Housing starts will increase by 36 percent next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics.

• First American CoreLogic predicts continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring.

• Harvard economist Edward Glaeser doesn’t foresee property values rising to previous levels even in attractive locales. “The harsh reality is that real estate prices that go up come down. I’ve found that for every real $1 increase in local market prices over a five-year period, prices go down 32¢ over the following five years,” Glaeser says.

Pending home sales attain 30-month high

The Pending Home Sales Index rose 6.4 percent in August from July, 12.4 percent higher than August 2008, the National Association of Realtors (NAR) reported yesterday.

The index of single-family homes that went under contract in August reached the highest level since March 2007.