Pending Home Sales Up 61% In The Midwest? You Can Not Be Serious…

In his latest commentary on the National Association of Realtors’ Existing Home Sales reports, John Williams of Shadowstats.com had this comment: “the quality of data underlying this series remains questionable, as seen in erratic reporting over the years” (Shadowstats.com).  This speaks to my recurring assertion that the National of Association of Realtors’ existing home sales reports have become just as questionable as the Government-generated new home sales reports.

More fascinating to watch is the NAR’s chief clown, Larry Yun, vacillate between his justifications for worse than expected reports and his glowing promotion of better than expected reports.  The volatility of both the NAR’s report and Yun’s commentary on these reports is become more unstable and erratic in the past 12-18 months.  I have previously written several commentaries on this issue with detailed source-references supporting my assertions.

In this context, the latest “Pending Homes Sales” report is hardly worth commenting on. Perhaps the Zerohedge title of their announcement of the report sums it up succinctly: “February Pending Home Sales Surge By Most on Record Amid Midwest Miracle” LINK.

The “Midwest Miracle” involves an 11.4% seasonally adjusted annualized rate jump in pending home sales in the midwest region for February vs. January.  What’s even more preposterous is “not seasonally adjusted” 61.4% moonshot in pending home sales in the midwest vs. January.    Aside from data collections issues, the biggest source of potential error in occurs in the “seasonal adjustments” and the conversion of month to month and year over year seasonally adjusted data into an annualized rate.  The NAR uses the same seasonal adjustment algorithm as the Government.  Of course, every other privately compiles economic activity report is showing an economy sinking quickly into quagmire equivalent to that of 2008/2009, in direct contrast to the rosy Government and NAR data. Funny thing, that.

Perhaps most amusing is that when the NAR’s report miss expectations, Larry Yun attributes it to the weather.  I guess the weather in the midwest was sunny and warm everyday in February…Of course, there’s nothing like “boots on the ground” reports from readers, like this one from southern Ohio (the midwest, by the way):

Another data point for you on the RE front Dave: I sold my home (in SW Ohio) this time last year. I listed it on Zillow with no realtor involvement. I reduced the price of the house by the imputed cost savings of not having a realtor -every one of which I ever met was a useless bullshitter. I had a contract in less than two weeks. The millennial couple who bought it (btw, a lot of house for a young couple) put NOTHING down. At closing I noticed their mortgage was about 103% LTV. The VA charges all kinds of fees and the buyers just rolled most of them up into the mortgage. On top of his 103% LTV note he still had to come up w/ 7 or 8 grand for other silly financing fees and pre-paids.

Anyway, I priced my house to sell and it sold -quickly. Some of my neighbors were greedy and listed theirs with useless realtors asking ‘mkt prices’ and they are STILL sitting unsold. On top of that, 3 builders built spec homes last summer and all 3 of those are also sitting unsold.  What is going to happen when/if interest rates ever normalize?

6 thoughts on “Pending Home Sales Up 61% In The Midwest? You Can Not Be Serious…

  1. Interest rates can never normalize. If they did the US government could not service the interest payments, let alone the principal that goes unserviced and grows each and every year.

    College grads who would normally be first time buyers are too overwhelmed with debt to even think about purchasing a home. And default rates on student loan debt has increased to 11%. And by the time graduates pay down their student loan debt, their taxes are likely to be so high that purchasing a home will be out of the question.

    I see nothing but lies coming from our government regarding the health of the economy, supported by the mockingbird mainstream presstitute media. Sooner or later the truth will come out (it always does doesn’t it?). When it does, we will all be in for a heaping ration of excrement.

  2. I was in the Midwest for the holiday weekend in particular the areas around Milwaukee Wisconsin.
    I could not believe my eyes. Houses, I’m talking Mc mansion type houses. High end apartment
    complex’s being built on old quarry sites. I spoke to a local G.C. and asked who are the buyers
    of the houses were. He said a lot of Doctors and health care professionals, Insurance executives
    and attorneys. As for the high end apartments those are being rented to the above professions
    staff. I once read a comment from Bill Bonner and his investment advice about real estate, “it
    is very local”. That came to mind after this weekends experience. Things can look very different
    from one geographical area to the next. The amount of money that has been injected into the system
    is showing up in very unusual places.

  3. ‘John Williams of Shadowstats.com had this comment:
    “the quality of data underlying this series remains questionable” ‘

    That is the understatement of the year.

    Leave it to the National Association of Real-liar-turds to paint a picture of the housing market as sunshine and roses while the reality is Pompeii with the volcano erupting.

  4. This one has me perplexed too Dave…here in OZ the banks lending& Chinese “investment” are the only things driving building/ real-estate ponzi , there is absolutely no other productivity driving anything in the OZ market …except maybe some new patent drug in the well documented health Care ponzi. The banks in OZ are at least 500 to 1 in terms of leverage…completely bankrupt…It can only be central bank intervention hold markets at the nose bleed levels…the mbs purchases’ blah blah.
    I still believe this ends in a currency event ,,,either chinese, japanese or maybe euro…it has got to be hanging by a thread..

  5. I think there has been a fundamental shift in real estate ownership and rental dynamics. It is obvious that the majority of the buyers are deep pocketed investors. They are flush with cash, and they need to park it in something which is of “real value”. Until mid 2011, lot of money went into gold. After gold got hammered, big money has been flowing/ money flow heavily increased into real estate.
    With prices so high, home ownership is going to be a distant dream for current generation of renters and the next generations. The few who do manage to buy a house are going to be indentured slaves working hard to keep their head above water. Sensing that very few can afford to buy a home, rental property owners have been engaging in outright price gouging from their tenants. The current rental market is nothing short of legal extortion. We owe special thanks to helicopter Bernanke for orchestrating this wonderful “economic recovery”.

    Barely a few years ago, people were warning that “there will be a price to pay for all this irresponsible policies, the future generation will have to bear the burden”. Guess what, the future is here. From being somewhat hopeful/wishful for a better tomorrow, in just a few years the American worker has been crushed to a state of hopelessness/resignation/defeat. But hey, Wall St executives got their fat bonuses, Bernanke anointed himself a hero and Obama ushered in an era of “prosperity”.

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