The Pending Home Sales Index for contracts signed in June 2008 on a seasonally adjusted basis was at 89.0 up 5.3% from 84.5 in May 2008 but was down 12.2% compared to June 2007's figure of 101.4. Without seasonal adjustments, the index was down 12.1% compared to June 2007.
2001 was previously the slowest year for pending home sales on record. June 2008 was 6.6% below June 2001's sales pace. May 2008 was 17.5% below the 2001 level.
The NAR raised their 2008 median home sales price forecast to $206,700 from $205,300. The NAR is forecasting 2009 median home sales prices to be at $215,800. In June they had dropped their 2008 forecast by 4.1% from $213,700 to $205,000. According to Lawrence Yun, NAR chief economist, sales have been in a pattern of rising and falling within a fairly narrow range. Yun said “The vacillation of data from one month to the next indicates a housing market in transition.” It does appear that home sales has bottomed out. We may be transitioning from declining home prices and sales to rising home sales with declining prices.
I don't expect home prices to bottom until supply and demand are in equilibrium. Currently there is 11.1 months supply of existing homes. 6 months is where supply and demand are considered balanced.
April, May and June are the three biggest months for Pending Home Sales. Afterwards, sales quickly taper off. Pending Home Sales for June indicates that the July and August existing sales may pick up a little bit. Last year existing sales plummeted in the Fall. This Fall will be the big test for existing sales.
Sphere: Related Content
No comments:
Post a Comment