Lace up the hip waders, Fools, because it's time once again for our monthly trip through the National Association of Realtors' home sales numbers. You know, the PR in which trained economists -- in service to an organization that wants a 6% cut on every used home sale in the U.S. -- spin elaborate fantasies that fly in the face of logic, but always just happen to support that noble, 6% goal.
Here are the facts, according to the NAR press release. July home sales were down 9% from July 2006. Current NAR spinner-in-chief Lawrence Yun claims down is up -- or at least, not down -- calling this drop "Stable." Better yet, he provides a completely unsupported supposition, arguing, "Home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months."
Sure, Larry, trouble is, there's an ongoing lack of mortgage liquidity because folks like you talked up home prices for years, and now creditors don't believe your shtick. The banks and hedge funds out there aren't so keen on giving free money to the likes of Countrywide Financial
The drop in home sales (and median prices, by the way) will probably be no surprise to anyone who read past the vapid, misleading headlines last week, when the Commerce Department's new home sales numbers appeared to show a 10.2% drop in year-over-year sales for the month of July. I say "appeared" because, in fact, the drop (as well as a meaningless, but widely reported, month-to-month gain) was subject to a range of error of more than plus or minus 12%, meaning that, in fact, there's no way to say whether last month's new home sales numbers represented an increase or a decrease.
My bet, of course, is on decrease. After all, those Commerce Department numbers also showed that the amount of time it takes to sell a new home nearly doubled, from some 3.6 months in July, 2006, to 6.1 months on the market in July, 2007. Factor in the heady cancellation numbers at builders like Toll Brothers
The NAR's figures show an incredible 9.6 months' worth of used home inventory on the market right now, precisely at the time when a major wave of ARM adjustments is on the way. As a number of these folks will, in all likelihood, no longer be able to afford the monthly mortgage bill, and they won't be able to refinance into another short-sighted, gimmicky mortgage, that will dump even more inventory on the market as people seek to pull these millstones off their necks.
The real kicker is that NAR President Pat Combs is caught in this press release begging for a Federal bailout for all those poor suckers stuck in bad loans -- as if she and her organization, through constant pumping of housing as an "investment," and denial of plain facts on sales and pricing, don't bear a giant share of the blame for putting these unfortunate buyers at risk. Hey Pat, how about you Realtors put up your own money to bail out these unfortunates? Maybe pledge half of your 6% cut for a year or two?
Naw, much easier to ask us taxpayers to atone for the NAR's sins.
At the time of publication, Seth Jayson, a Top 10 CAPS player, had no positions in any company mentioned here. See his latest CAPS blog commentary here. View his stock holdings and Fool profile here. Bank of America is an Income Investor recommendation. Fool rules are here.