Existing home sales in the month of July fell by more than economists had anticipated, according to a report released this morning by the National Association of Realtors.
What is surprising is that they say economists were surprised by the news.
For avid readers of this blog, they knew this was coming way back on July 7, ’10, when I published a post entitled “San Diego real estate 2010 2nd. Half Outlook … double-dips“ In part, I said “One could speculate that the current slowdown I’ve seen in San Diego neighborhoods would not be reflected in reports for closed sales until August. On July 1, the National Association of Realtors reported that sales of existing homes dropped 30% in May from April. For the Western states this drop was reported as 20.9%. Though the West obviously was doing better than the rest of the country, the huge double-digit declines are a major red flag that cannot be ignored.”
Back to today’s report … The National Association of Realtors said existing home sales fell by 27.2 percent to an annual rate of 3.83 million units in July from a downwardly revised 5.26 million unit rate in June. Economists had expected existing home sales to fall by about 12.1 percent to 4.72 million from the 5.37 million originally reported for the previous month.
July 2010 sales were 25.5 percent below the 5.14 million-unit level in the same month last year, data showed.
Sales weakness was broad based, with single-family home sales down 27.1 percent and condos down 28.1 percent.
So, with the actual home sales fall of 27.2% and the economists predicating a 12.1% drop, hopefully one can see it’s practically worthless to rely on anything said by most economists. Think about the most recent jobless reports, GDP reports, etc. How many of these reports had headlines like : Economists Surprised, More Than Economists predicted, Unexpected by economic consensus, etc? Perhaps I should not be so critical, after all most of these economists work for government agencies or sales organizations like the National Association of Realtors. Let’s keep things in perspective; just a few weeks ago, Vice President Biden called this the Summer of Recovery!
