Wednesday, November 11, 2015

Lawler: Post Mortem on Existing Home Sales in September

by Bill McBride on 11/11/2015 08:32:00 PM

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for 266 thousand initial claims, down from 276 thousand the previous week.

• At 10:00 AM, Job Openings and Labor Turnover Survey for September from the BLS. Jobs openings decreased in August to 5.370 million from 5.668 million in July. The number of job openings were up 9% year-over-year, and Quits were up 9% year-over-year.

• At 2:00 PM, the Monthly Treasury Budget Statement for October.

• At 6:00 PM, Speech by Fed Vice Chairman Stanley Fischer, The Transmission of Exchange Rate Changes to Output and Inflation, At the Conference on Monetary Policy Implementation and Transmission in the Post-Crisis Period, Washington, D.C.

From housing economist Tom Lawler:

In its latest Existing Home Sales Report released last month, the National Association of Realtors estimated that existing home sales ran at a seasonally adjusted annual rate of 5.55 million in September, way above consensus but very close to my estimate based on regional tracking of local realtor/MLS reports available prior to the NAR’s release. Since then several additional local realtor/MLS reports have been released, and based on all local realtor/MLS reports released for September it appears that if anything the NAR’s estimate of the YOY % increase in home sales for September was a bit low. The NAR’s estimate showed a YOY % increase in unadjusted sales of 8.0% for September, with YOY increases of 10.2% in the Northeast, 10.9% in the Midwest, 8.5% in the West, but only 5.5% in the South. Local realtor reports from the South, however, strongly suggest that home sales in that region grow by significantly more than 5.5% YOY. For the other regions, in contrast, the NAR estimates seem in line with local realtor reports.

Of course, this does not necessarily mean that the NAR will revise its September sales estimate higher in this month’s report. The NAR’s sample is based almost entirely from MLS reports from metropolitan areas, while where available I use state-wide realtor reports, and it is possible that the NAR’s sample was not representative of overall sales in the region. But there is a slightly better than even chance that the NAR will revise upward its estimate for home sales in the South for September.

In re October, I don’t yet have a large enough sample of reports to generate a national estimate, but incoming reports strongly suggest that the pace of existing home sales in October (seasonally adjusted) will be down significantly from September’s pace.
emphasis added