STOP! Don't help us anymore.

Recently the National Association of Realtors (NAR) came out with their numbers for October 2009. They reported a year to date, seasonally adjusted gain in existing home sales of 23.5%. This is a nationwide number, but how do sales look at a local level. Different parts of the country are affected in different ways by the current downturn in the economy.

In the Charlotte area, the real estate market was greatly affected by banking with Wachovia (now Wells Fargo) and Bank of America headquarted from here. A few years ago, it seemed as though the builder could not build homes and Realtors could not list homes fast enough.

Here are some numbers I put together from Carolina Multiple Listing Service. These numbers reflect Charlotte and the surrounding MLS area. Year to date, through October 2009, home sales are down about 22% compared to last year. Unlike NAR, these numbers are just raw monthly sales numbers and are not seasonally adjusted. Residential closings did increase for the month of October, by 19.6%, but one or two good months does not show a turn around in real estate, as NAR seems to suggest. If I understand it correctly, seasonally adjusted means the annual rate for a particular month represents what the actual sales for a year would be if that rate were maintained for twelve months. My question is would not the most recent month’s sales be weighted heavy with the homebuyer tax credit? If so, does that inflate the number of projected annual sales? I understand it in normal times, but the way the economy is makes me wonder if the NAR number is a high projection. Maybe I don’t understand how they project the numbers.

I know NAR has to keep putting a positive spin on home sales. That’s a big part of their job, but I also think we have to be honest with our clients and ourselves. The market we had a couple of years ago will not be back anytime soon. In my opinion, unemployment has to come down before we see any kind of significant change in home sales, auto sales or anything else. Nationally it is at 10.2%. Here in North Carolina it moved up from 10.8% to 11.0% according to the latest numbers released from The Bureau of Labor Statistics. I recently read an article by Mort Kondracke. In his article he quoted an economist, David Smick, as saying in order for unemployment to fall from 10.2% to 5%, the economy would have to produce 250,000 jobs a month for the next five years. Think about that for a minute. Do you have enough confidence in our leaders in Washington? These cannot be government created jobs just to make the numbers look better. They must be real jobs from the private sector.

Another key factor is government spending. Stop! Our national debt is now over 12 trillion dollars. We had a 1.5 trillion dollar deficit for fiscal year 2009, a projected 1.4 trillion dollars for 2010 and huge projected deficits for years to come. Please don’t help us anymore.

We are kidding ourselves when we allow the government to continue putting band-aids like cash for clunkers or the homebuyer’s tax credit on an open wound. As Dave Ramsey suggested, learn to use the word NO.