Existing Home Sales and Median Prices Rise Slightly

The National Association of Realtors released the existing home sales figures for May 2009 today.  Sales increased to a seasonally adjusted annual rate of 4.770 million units in March up from 4.660 million units in April and down from 4.950 million units in May 2008.

The median sales price was $176,000 for May up from $166,600 in April (up 3.8%) but down from $207,900 in May 2008 (down 16.8%). Months supply was 9.6 in May, down from 10.1 in April. According to the NAR, distressed properties accounted for 33% of all transactions in May down from 45% in April. 

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Existing home sales decrease but median sales price is up

The National Association of Realtors released the existing home sales figures for March 2009 yesterday. Sales decreased to a seasonally adjusted annual rate of 4.570 million units in March down from 4.710 million units in February and down from 4.920 million units in March 2008.

The median sales price was $175,200 for March up from $168,200 in February (up 4.16%) but down from $200,100 in March 2008 (down 12.4%).  Months supply was 9.8 in March, up from 9.7 in February.  According to the NAR, distressed properties accounted for just over half of all transactions in March and are selling for 20 percent less than traditional homes.

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Existing Home Sales Rise

The National Association of Realtors released the existing home sales figures for February 2009 today. Sales increased to a seasonally adjusted annual rate of 4.720 million units in February up from 4.490 million units in January but down from 4.950 million units in February 2008. The median sales price was $165,400 for February up from $164,800 in January (up 0.4%) but down from $195,800 in February 2008 (down 15.5%).  The January numbers were revised downward from $170,300 as reported last month to $164,800. 

Months supply was 9.7 in February, the same as it was in January.  According to the NAR, currently 40-45% of all transactions are distressed sales.

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New Home Sales Rise in February

New home sales data showed signs of settling down.  Permits rose 3% in February compared to January 2009.  Year over year permits were down 44%.  Starts in February were up 22% compared to the previous month and were down 47% year over year.  Completions in February were up 2% compared to January and were down 37% compared to a year ago. 

The bad news is this is increasing the supply of new homes.  There are already 13.3 months supply of homes.  Months supply has risen every month for the last 4 months now.  There will continue to be downward pressure on new home prices.

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Existing Home Sales and Prices Fall

The National Association of Realtors released the existing home sales figures for January 2009 today. Sales decreased to a seasonally adjusted annual rate of 4.490 million units in January down from 4.740 million units in December but down from 4.910 million units in January 2008. The median sales price was $170,300 for January down from $175,700 in December (down 3.1%) and down from $199,800 in January 2008 (down 14.8%). The price decline was again led by the West where the median price declined by 4.2% compared to the previous month dropping from a median price of $229,700 in December 2008 to $220,000 last month. The median home price for the West in July 2007 was at $349,400; the median is now 37.0% lower.

Months supply rose to 9.6 in January from 9.4 in December. This was due to a drop in sales while inventory dropped slightly. According to the NAR, currently 45% of all transactions are distressed sales.

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Existing home sales are up; prices continue down

The National Association of Realtors released the existing home sales figures for December 2008 today. Sales increased to a seasonally adjusted annual rate of 4.740 million units in December up from 4.450 million units in November but down from 4.910 million units in December 2007. The median sales price was $175,400 for December down from $180,300 in November (down 2.7%) and down from $207,000 in December 2007 (down 15.3%). The price decline was again led by the West where the median price declined by 11.6% compared to the previous month dropping from a median price of $241,000 in November 2008 to $213,100 last month. The median home price for the West in July 2007 was at $349,400; the median is now 39.0% lower.

Month's supply dropped 9.3 in December from 11.2 in November. This was largely due to a decrease in inventory from $4.163 million units in November to $3.676 million units in December. Inventory has dropped by an average of 8.2% in December from 2001 to 2007. This year the drop was 11.7%; larger than normal but not exceptionally large.

According to the NAR, currently 45% of all transactions are distressed sales. There is currently a moratorium on foreclosures that will be ending soon, so housing will continue to fall under intense pressure. Perhaps the biggest question is when will prices in the West firm up.

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New home construction at record low pace

The U.S. Census Bureau and the HUD Department announced the new homes construction stats for December 2008 today. Total building permits were at a seasonally adjusted annual rate of 549,000 which was 10.7% below November 2008 and was down 50.6% from a year ago. 1 unit permits were at a seasonally adjusted annual rate of 363,000 which was down 12.3% from the previous month and down 49.2% from a year ago. This is the lowest rate on record going back to 1960.  If adjusted for population growth, today's figures would be much lower. Total housing starts were at a seasonally adjusted annual rate of 550,000 which was down 15.5% from the previous month, and down 45.0% below December 2007. Economists had forecast starts to be at a 605,000 annual pace.  1 unit starts were at 398,000 which is down 13.5.0% from November 2008 and down 48.9% from a year ago. Housing completions were at a seasonally adjusted annual rate of 1,015,000 (1 units were at 668,000) which was 5.2% above the previous month, and 23.6% below December 2007.

There is an oversupply of housing so these large drops in construction are actually a good thing.  Even though construction of new homes has dropped quickly, sales have dropped just as fast.  Soon months supply will start to inch down, but we are still far away from supply and demand being balanced. New homes are also adversely affected by the large surplus of existing homes.

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Existing Home Sales plummet in November

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.

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Existing homes sales decline slightly; prices decline sharply

The National Association of Realtors released the existing home sales figures for October 2008 today.  Sales decreased to a seasonally adjusted annual rate of 4.980 million units in October, down 3.11% from September 2008 and down 1.58% from October 2007.  The median sales price was $183,300 for October down sharply from $191,400 in September (down 4.2%) and down from $206,700 in October 2007 (down 8.98%).  The price decline was led by the West where the median price declined by 9.3% 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. 

According to Lawrence Yun, NAR chief economist:

“Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions.  We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.”

I agree with Yun in that this recession is being led by the housing crisis.  I believe that we won't see the bottom until the real estate bottom is in sight.  Month's supply rose from 10.0 in September to 10.2 in October. Month's supply is normally lowest in the winter months. There is a huge oversupply of homes that the industry has to work through before supply and demand is balanced.

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New home sales in September are up slightly from previous month; decline in prices is picking up steam

The U.S. Census Bureau and the Department of HUD announced today that the new single family home sales for September 2008 were at a seasonally adjusted annual rate of 464,000. This was 2.7% higher than August 2008 and 33.1% less than September 2007. Economists were expecting that sales would fall to 450,000.  The median sales price fell to $218,400 in September down 0.9% from August 2008 and down 9.1% from September 2007.  This is the steepest rate of decline since median prices peaked in March 2007.

Months Supply fell to 10.4 in September, from 11.4 in August. Months Supply is the amount of time it would take to completely sell the new homes inventory if no new homes were built and if the sales pace continued as is. Supply and Demand is balanced at 6 months. The current level will continue to put pressure on home prices both for new homes and existing homes.

The financial crisis really picked up steam in October.  New home sales typically rise in October from September.  It will be interesting to see what happens to new home sales  for October.

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Existing home sales rise on lower prices

The National Association of Realtors released the existing home sales figures for September 2008 today. Sales increased to a seasonally adjusted annual rate of 5.180 million units in September, up 5.50% from August 2008 and up 1.37% from September 2007.  This is the first time sales have increased on a year to year basis in 30 months.   The median sales price was $191,600 for September down sharply from $203,100 in August (down 5.7%) and down from $210,500 in September 2007 (down 8.98%).  According to Lawrence Yun, NAR chief economist, “compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices.”  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.

Month's supply fell from 10.6 to 9.9 in September.  Month's supply is normally lowest in the winter months.  There is still a huge oversupply of homes that the industry has to work through before supply and demand is balanced. 

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New home starts down sharply; supply is still rising

The U.S. Census Bureau and the HUD Department announced the new homes construction stats for September 2008 today. Total building permits were at a seasonally adjusted annual rate of 786,000 which was 8.3% below August 2008 and was down 38.4% from a year ago. 1 unit permits were at a seasonally adjusted annual rate of 532,000 which was down 3.8% from the previous month and down 38.9% from a year ago. 1 unit permits are at their lowest annual rate since August 1982. Total housing starts were at a seasonally adjusted annual rate of 817,000 which was down 6.3% from the previous month, and down 31.1% below September 2007. 1 unit starts were at 544,000 which is down 12.0% from August 2008 and down 41.9% from a year ago. Housing completions were at a seasonally adjusted annual rate of 1,097,000 (1 units were at 806,000) which was 11.7% above the previous month, and 20.4% below September 2007.

Permits and starts of new homes are starting to be less than demand. Completions are still higher than the current level of sales.  Soon months supply will start to inch down, but we are still far away from supply and demand being balanced.  New homes are also adversely affected by the large surplus of existing homes. 

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New Home Sales continue to weaken

The U.S. Census Bureau and the Department of HUD announced today that the new single family home sales for August 2008 were at a seasonally adjusted annual rate of 460,000. This was 11.5% less than July 2008 and 34.5% less than August 2007. Economists were expecting that sales would fall to 510,000.

Months Supply reached 10.9 in August, up from 10.3 in July. Months Supply is the amount of time it would take to completely sell the new homes inventory if no new homes were built and if the sales pace continued as is. Supply and Demand is balanced at 6 months. The current level will continue to put pressure on home prices both for new homes and existing homes.

New home sales are still weakening and now we are entering the slow months for new home sales.  The $700 billion bailout isn't helping the psychology of buyers either.

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Existing Home Sales continue to fall; inventory stabilizes

The National Association of Realtors released the existing home sales figures for August 2008 today. Sales decreased to a seasonally adjusted annual rate of 4.910 million units in August, down 2.19% from July 2008 and down 10.73% from August 2007. Sales have averaged an annual rate of 4.940 for the first eight months this year. The median sales price was $203,100 for August down sharply from $212,400 in July (down 3.4%) and down from $224,400 in August 2007 (down 9.5%). The price declines were led by the West which was down 10.8% in August compared to the previous month. The other 3 regions were only down 0.9% for the month. According to Lawrence Yun, NAR chief economist: “The highest concentration of foreclosures is in the West, which is weighing down the median price because many buyers are taking advantage of deeply discounted prices.”

The inventory of existing homes fell to 4.225 million units down from 4.575 million in July 2008. Even though sales fell in August, the fall in inventory was bigger causing Month's supply to fall to 10.4 from the previous month's figure of 10.9. While month's supply and inventory improved slightly, there is still too much supply. We are also entering into a slower season for real estate.

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