People also need to remember that a “national average” is so homogenized, it doesn’t apply to anyone. (Kind of like the one-size fits all clothing)

You’ve got to pay attention to what things are SELLING FOR (different than listing price) wherever you are.

National charts are all fine and dandy, but they won’t help you price your property right for your market.

Consider that just to stay PAR with inflation, every property must be currently appreciating at abou 3% per year.

That means that if the current median price appreciation is -2%, you are really down 5% on your property.

If you are a family living in the home, chances are better you can ride that out – and I hope you do.

If you are a flipper, or only an investor, read the writing on the wall, figure in the property taxes, repairs, and real estates commissions, and realize that you are losing money big-time. Time to GET OUT!

– The Open House Network – ROpenHouse

Fair question-

It does look like a trough, doesn’t it?  So far this year we look to be on track for 2003 level sales, and 2003 wasn’t considered a bad year.  I expect sales to gradually increase, at least through the first half of this year.  This chart doesn’t do a good job of ilustrating the problem though.  I don’t in general like having sales and inventory on different graphs.  The NAR however, does not thoughtfully provide us with historical data for inventory, and I haven’t dug into the records to mine it all out yet. 

When you are determining rate, as I’m sure you know, you need the term "per" somewhere.  "Miles per hour," or "miles per gallon," for example.  What this chart does is shows sales without context.  For example:

Let’s say I’m the CEO of "DoomMart," which in 2003 had 10 stores.  Sales really started taking off, so I added seven stores to handle all of the traffic, then sales go back to 2003 levels.

It’s easy to see the problem here.  The sales that looked great in 2003, aren’t looking so great any more.  Sales per store are now way down.

Yes the example breaks down on several levels, but here’s the point. 

The NAR only lists reports back to 2004 on their site, [that's why I listed 2004 inventory] but based on articles from around that time in 2003, 2.2 million units in inventory is a fairly close guess.  That means that nationally inventory is up around  70% from 2003.  Sellers have a lot more competition, and are going to have to be a lot more aggressive [read that lower prices] to work through this inventory. Note the inventory rose MOM in spite of increased sales.  What will indicate improvement is when we see a good solid trend [read that more than 2 data points!] of inventory reduction. Without that, sales numbers wherever they are at don’t impress me.

Phoenix by the way, is the same, only worse.  Here’s last month’s Phoenix report.

It’s my first time posting here. But I do notice an improving trend in the YOY National Home Sales graph. Granted that all the sales are still less than last year, but the gap do seem to be closing ever since sept 06. So if inventory does not go above the high water mark set around sept 06, would this mean that the picture is actually improving nationally? Do anyone know what the trend is for Phoenix specifically?

Lereah even admits that events like weather can change the month-to-month. You can’t see a long term trend with a couple of data points.

What looks most significant to me is the rising inventory. After all, that’s the point isn’t it, to clear the inventory? If that is rising, you are falling further behind.

Whatever the sales number, until that inventory is eaten up, the market is going to be in a bad way.

How disappointing to see that at least some media outlets out there are still taking Lereah’s spin and double-speak at its word:

“US home sales rise in February”
US existing home sales rose by an encouraging 3.9 per cent last month, the National Association of Realtors (NAR) has said.
The strong figures for February come despite growing fears of a slowdown in the US property market.
Property experts believe that falling prices are enticing buyers back into the market.”

http://www.999today.com/propertyandrealestate/news/story/9501.html

What a positive, uplifting story.
I guess there are still people out there that believe whatever the big media tells them about real estate “must” be true. How sad.

Of course, you only need to know that Lereah was comparing month-over-month, and NOT year over year (as he has in the past), to see how lame his statements are.