The National Association of Realtors released the existing home sales figures for November 2008 today. Sales decreased to a seasonally adjusted annual rate of 4.490 million units in November down sharply from 4.980 million units in October and 5.020 million units in November 2007. The median sales price was $181,00 for November down from $186,500 in October (down 2.8%) and down from $208,800 in November 2007 (down 13.2%). The price decline was again led by the West where the median price declined by 6.3% compared to the previous month. March through August are the strongest months for home prices. We are now entering the weak time for home prices. The market turmoil is not helping things either.
In the NAR's news release Lawrence Yun, NAR chief economist, cautions:
"There will be negative consequences if housing stimulus is delayed. Falling home prices would lead to faster contraction in consumer spending and further deterioration in bank balance sheets. More importantly, falling home values would lead to higher loan defaults, including those recently modified distressed mortgages.” I agree with Yun on the consequences of falling home prices. However, I think that even with housing stimulus, home prices will continue to decline until they are in line with historical norms for Price to Rent Ratios, Price to Income Ratios, and until Supply is in line with Demand.
Month's supply rose to 11.2 in November from 10.3 in October. Month's supply is normally lowest in the winter months. November's increase is an ominous omen for 2009.
Sphere: Related Content
2 comments:
Post a Comment