The NAR (National Association of Realtors) released their November Pending Home Sales Index today.
The NAR press release trumpets five consecutive months of increasing pending sales using seasonally adjusted data and forecasts a “gradually improving” home sales market in 2011.
They are not seeing the real trend in the unadjusted data. That indicates a declining trend year over year, as shown in the following graphic:
The number of existing home sales in December 2009 was 413,000. The forecast we have for December 2010 is 326,000, based on the November pending home sales index. That is a decline of 21% year-over-year.
Our forecast last month was for 360,000 existing home sales and the numbers came in at 353,000 (without seasonal adjustment).
There is no truth that there is yet an "improvement" or "gradual recovery" of any kind underway in existing home sales. This absence of buyers will only tend to put downward pressure on home prices; the unadjusted data does not support the NAR projection that home prices will remain near or slightly above 2010 levels in the coming year.
The NAR manipulation of the data is based on no more than wishful thinking.
