Latest numbers more evidence of real estate’s fall

Sometimes, no matter how hard you try, it’s impossible to spin bad news into good news. At least give the National Association of Realtors points for trying.

The association yesterday, in its Pending Home Sales Index, wrote that real estate agents should sell 5.67 million existing homes in 2007. The association added that sales will increase in 2008 to 5.70 million.

The association also mentioned that October of this year saw a small monthly gain in home sales. This is the second consecutive monthly gain, the association reported.

Sounds like good news, right? Well, maybe not.

First, those two monthly gains were miniscule, especially compared to the steep decline in sales the industry has seen in the last year. Secondly, home sales are still way down from where they were just one year ago.

This, actually, is the real news. The Realtors association reports it, just not as prominently. The sales of existing homes in 2006 totaled 6.48 million. This means that sales in 2007, even if it does go on to be the fifth-highest year for existing-home sales on record, dropped off significantly from those in 2006.

And that is why anyone who is trying to sell a house knows that the residential real estate market has crashed. Just drive through your community one day and count the “For Sale” signs. You’ll find a lot. And you’ll find that they’ll still be there, month after month.

No matter how Realtor associations try to spin it, we are in the midst of a severe residential real estate slump. Realtors may try to blame negative news coverage for their problems, but we all know the real reason for the housing crash: Prices rose too quickly, too fast. Too many investors entered the market hoping to flip properties quickly for fast cash. And too many borrowers stretched themselves to their finanical limits to get into a home.

It was a recipe for disaster. And now that disaster is here.