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Existing home sales drop in July; Actual 2011 home sales through July down 5 percent from same time last year

Dennis NormanToday’s existing home sales report from the National Association of REALTORS® shows existing home sales in July were at at a seasonally adjusted-annual rate of 4.67 million units which is a decrease of 3.5 percent from the month before, an increase of 21.0 percent from a year ago and is the lowest rate of home sales since November 2010 when it was 4.64 million.

Home prices decrease after being on the rise for four-consecutive months….

The median home price in the U.S. in July was $174,000, a decrease of just under 1.0 percent from the month before and a decrease of 4.4 percent from a year ago when the median price was $182,100.

Number of homes for sale decreases but months supply increases….

The number of existing homes on the market decreased in July by 1.7 percent to 3.652 million homes, and is down 8.9 percent from a year ago when there were 4.007 million homes for sale. Even though the inventory of homes for sale decreased, so did the rate of home sales, therefore the supply of homes increased by 2.2 percent to 9.4 months from 9.2 months the month before but is down 24.8 percent from a year ago when the supply was 12.5 months.

Metro Home Sales and Prices –

NAR publishes existing home sales for major metropolitan areas of the U.S. Highlights from that report for June include:

  • Last month, 5 metro areas saw an increase in sales from a year ago and this month ALL of them did with Miami-Ft. Lauderdale leading the way again with a whopping 35.6 percent increase in sales.
    • Minneapolis-St. Paul had the second largest year-over-year sales increase at 32.5 percent .
    • Kansas City, MO/KS came in third with a 25.7 percent increase in sales.
  • Four metros (down from 6 the prior month) saw year-over-year increases in home pricesthis month.
    • San Antoinio, TX, saw the largest one-year increase in home prices this month with a 3.6 percent increase, followed by Cincinnati, OH at 2.8 percent, then New Orleans, LA with a 1.0 percent increase.
    • Phoenix, AZ saw the biggest one-year decrease in home prices this month, with a decline of 13.3 percent from the year before, followed by Miami-Ft. Lauderdale, FL with a 12.3 percent decline and Boston, MA with a 10.3 percent decline.

Lawrence Yun, NAR chief economist, said there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”

The following are the ACTUAL Existing Home sales for July, 2011 reported by NAR without any adjustment or fluff:

  • There were 458,000 existing homes sold during the month which is a decrease of 11.1 percent from the month before and a 17.1 percent increase from a year ago.
  • Through July of 2011, there have been 2,849,000 homes sold, down almost 5.0 percent from the same time last year when there were 2,998,000 homes sold.
  • Below are highlights from each region for the month;
    • Northeast – 85,000 homes sold, an increase of 7.6 percent from the prior month a increase of 16.4 percent from the year before.
    • Midwest – 104,000 homes sold, a decrease of 8.8 percent from the prior month and an increase of 25.3 percent from the year before.
    • South – 173,000 homes sold, a decrease of 11.7 percent from the prior month and an increase of 15.3 percent from the year before.
    • West – 96,000 homes sold, a decrease of 23.8 percent from the prior month and an increase of 12.9 percent from the year before.

Other highlights of the NAR Report for July 2011:

  • Distressed sales accounted for 29 percent of all home sales for the month, down from 30 percent the month before.
  • First-Time homebuyers accounted for 32 percent of the home sales for the month, up from 31 percent the month before.
  • Investors were the buyers of 18 percent of the homes for the month, down from 19 percent the month before.
  • Repeat home buyers were responsible for approximately 50 percent of the month’s sales, the same as the month before.
  • Cash buyers were 29 percent of all sales for the month, same as the month before.

My Take On the Numbers:

I still think the market, in many areas, has found it’s bottom and is going to muddle along bottom for some time. Over the next year or so we should see distressed sales’ share of the market continue to decline which will take some pressure off home prices and allow prices to stabilize. As prices stabilize I think we will see increased sales activity, although the recovery is going to be a long, slow one.

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