On Monday the National Association of Realtors® (NAR) released its market report for closed January sales.  The next day Standard & Poor's released their report for December, thereby re-emphasizing the basic shortcomings of the Case-Shiller home-price index - it is too late and too limited in scope as well.  Does it make any sense for the media to rely on older (and less accurate) information published after NAR releases theirs?  I think not.

Here is what NAR reported on the January market, which represents contracts written in November or so and closed in January.  They report that the national median existing home price was down 4.6% over the preceding January.  Keep in mind NAR is talking about the "national real estate market," not your local one.  Unlike the faulty data used by S&P's Case-Shiller index, NAR pointed out "roughly half of the metro areas in the U.S. [experienced] price gains...."

Looking at the numbers closer to home (at least for me), existing home sales in the Northeast fell 3.6% from the preceding month, and were down 25.7% from the year earlier.  Remember, this is volume, not price, decline.  In fact, as the NAR report points out, "the median price in the Northeast was $270,800, up 3.1 percent from January 2007." 

Buyers in November may have been reluctant to enter into a contract for homes as the Holiday Season approached.  This is a normal phenomenon, as the market pace usually slows between Thanksgiving and New Year's.  At that time of year, corporate transferees are the most likely force in the market.  However, November was the start of the panic over the possibility of recession, so corporations pulled back from transfers, making the 2007 Holiday Season much less than jolly.

There have been several events that may be reflected in contracts written in January and February, including the introduction of Project Lifeline (to help those homeowners facing foreclosure), and the increase in maximum amount for "conforming mortgages" to $730,000 (to help the high-value real estate areas).  Mortgage companies are still smarting over billion-dollar losses, and have yet to prove very heroic (see my blog on "declining markets" the other day).

NAR will release numbers on contracts written in January (not necessarily closed) early next month.  That will give us an early indication of what to expect in the housing market this spring.  Don't expect much from the Midwest, since all the lawn signs are buried under snow, but other areas may show promise.  Never forget that your success as a buyer or seller is based on your local market, not the "national" market.