Today, the National Association of Realtors (NAR) released the Pending Home Sales Index for April. Seasonally adjusted, the index was up to 88.2 from 83.0 in March and was down 13.1% from 101.5 in April 2007. Not seasonally adjusted, the index was down 13.8% versus a year ago. Last month the index was down 21.7% year over year. Sales are starting to show traction with lower sales prices.
2001 was the previously the slowest year since the index was started. In April 2008 the index was 11.8% lower than April 2001 and in March 2008 the index was 19.5% lower than March 2001. Compared to historical months, sales are starting to show improvement over the first few months of the year.
The NAR also releases their economic forecast at the same time as their pending home sales update. Every month they have been slowly revising their projections for housing prices downward. In March their forecast for the median prices for 2008 was $216,300; April was $215,800; May was $213,700. They have now revised their 2008 estimate down to $205,000. The median sales price for the first quarter 2008 was $198,700 and for April it was $202,300. In order to have the median sales price come to their projection, they had high projections for the third quarter of 2008. In March their forecast the median prices for the third quarter 2008 was $228,700; April was $229,600; May was $226,300. They have now dropped their third quarter forecast to $208,400. In previous posts I had questioned how and when they would revise their forecasts closer to reality. The answer was quickly and quietly. Here is how they addressed their revisions:
"After unprecedented home price declines in the first half of the year, many markets can anticipate stabilizing price trends in the second half. The aggregate median existing-home price is likely to decline 8.4 percent in the first half of this year, and then begin to stabilize in the second half before rising 4.4 percent next year to $213,900."
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