2/22/2012
By David Urani, Research Analyst

The existing home sales figures are out from the NAR, and the headline did fall short of the consensus estimate, but due to revisions in the data it wasn't so bad. Nevertheless, after a massive revision of past years' data in December the NAR once again leaves us a little skeptical as to the accuracy of these figures, to be frank. Anyway, here's the rundown:

Annual sales of 4.57 million for January were below the expected 4.69 million, but previous data was revised such that the 4.3% m/m increase was larger than the consensus anticipated. Interestingly though, the December result was revised to a decline of 0.5% versus the previously reported 5.0% gain. As I said, this revision of the previous month (and others) may call into question the accuracy of the current data. Whatever the case, the current reading is the highest since May 2010 and indicates and ongoing uptrend.  All regions showed single-digit increases, with the West being the strongest and the Midwest being the slowest.

While we do not rely on the pricing figures in the NAR report for accuracy it is worth noting that median and average prices have been falling, and while seasonality is a factor both numbers suggest new multi-year lows. But on the flip side inventory is also at a new low, suggesting prices can firm up as the spring selling season kicks in.

David Urani
Wall Street Strategies