[Volokh] Orin Kerr: Lowest Reading *Ever*:

[notify at powerblogs.com]

Posted by Orin Kerr:
Lowest Reading *Ever*:
http://volokh.com/archives/archive_2008_04_06-2008_04_12.shtml#1207686330


   The Associated Press reports [1]that Pending Home Sales Hit Low in
   February:

       WASHINGTON (AP) - An industry group said Tuesday that pending
     U.S. home sales fell in February to the lowest reading since the
     index began, signaling the housing market distress is not yet over.
       The National Association of Realtors' seasonally adjusted index
     of pending sales for existing homes fell to 84.6 from January's
     upwardly revised reading of 86.2. The index stood at 107.6 in
     February 2007.
       Wall Street economists surveyed by Thomson/IFR had predicted the
     index would inch up to a reading of 86.3.
       A reading of 100 is equal to the average level of sales activity
     in when the index started. The previous low was August's reading of
     85.8, recorded at the height of the credit crunch.

     (emphasis added)
     Wow, the lowest reading ever, since the index began!! But when did
   the index begin? It turns out it began just a few years ago, in 2001.
   The National Association of Realtors website [2]explains that the
   index was started in the banner year of 2001 and uses that year as a
   baseline:

     An index of 100 is equal to the average level of contract activity
     during 2001, the first year to be analyzed. Coincidentally, 2001
     was the first of four consecutive record years for existing-home
     sales. 2001 sales are fairly close to the higher level of home
     sales expected in the coming decade relative to the norms
     experienced in the mid-1990s. As such, an index of 100 coincides
     with a historically high level of home sales activity.

     I don't have much to say about the housing market; I'm happy to
   leave that mostly to David B., our resident real estate blogger. But
   it seems like this might be worth noting in the article to give a more
   complete picture of things.

References

   1. http://www.breitbart.com/article.php?id=D8VTQL280&show_article=1
   2. http://www.realtor.org/Research.nsf/Pages/PHSBackground?OpenDocument