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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Wednesday, January 09, 2008

November Pending Home Sales Index

Yesterday, marked the release of the November 2007 Pending Home Sales Index, (PHSI). As its name implies, it is one of the most cited forward looking indexes in housing.

The news was not good. There is no evidence that demand alone will bring the market back to equilibrium. Nationally the index was down 19.2% from last year. In the South, the figure was 19.8% less. Today, we will simply offer a few reviews from around the web, and refrain from making merely duplicative comments.

A number of headlines noted that the index rose slightly from October 2007. Our own point of view is more in line with The Big Picture, who wrote the following:
...the year-over-year data is what matters, not the monthly changes. This release revealed a 19.2% drop in the index from last year, forecasting not stabilization, but even greater slippage.
Why greater slippage? The answer comes from Paper Economy, doing its usual great job, complete with charts.
Keep in mind the current pending sales decline comes ON TOP of last years historic fall-off so the continued weakness is a sure sign that the decline is not ephemeral.

And later in the article, that no region of the US was spared:

* Nationally the index was down 19.2% as compared to November 2006.
* The Northeast region was down 19.1% as compared to November 2006.
* The West region was down 18.5% as compared to November 2006.
* The Midwest region was down 18.6% as compared to November 2006.
* The South region was down 19.8% as compared to November 2006.

Yes, though few observers have mentioned it, 2006 came in less than 2005, which represented the most current peak in housing. Comparisons with one year ago are now to the point where that must be remembered.

When Will It All End?
With inventories more than 40% above last year, and sales down more than 40%, markets remain in serious imbalance. We have written repeatedly, credit crisis aside, that the path to stability can only come by reducing production and lowering prices to entice buyers.

Thanks for stopping by,
Black Bear Realty Website
828 689 2055
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