Friday, January 22, 2010

Wall Street "Experts" get the Real Estate Market Wrong Again

This month, one day the stock market took a fairly large drop and the recent for it was quoted as being because "the National Association of Realtors had reported that number of pending sales of existing homes had dropped in December over November pending sales fueling belief that the housing recovery that was happening had now actually stalled out". Why did that news leave experienced Realtors laughing rather then crying?
The truth of it is that this normally happens every December, regardless of market conditions. Pending sales are the numbers of escrows that are opened, not actual sales that have closed. December is the holiday period and people just normally do not look at homes and/or make buying decisions in that month. It happens every year but this time Wall Street decided to react to it.
What you should be interested in is what was the difference between this December and last December. In northern San Luis Obispo County itself, Pending sales were up 33% in December 2009 over December 2008. That is relevant, useful information and is a positive sign of recovery, not the other way around.
We all think the Wall Street gurus are pretty smart, but how many other times do they react incorrectly to reported news that they just do not know enough about?

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