Subscribe to our mailing list

* indicates required Email Address * First Name Last Name Opt-In Date Location

St. Louis Real Estate Search

 

Home Sales Plummet in July to Record Low

Dennis Norman

Dennis Norman

Beginning last November I have written several articles about the “sugar-rush” effect of tax credits and other stimulus on the housing market and voicing my concern that these things are short lived (like a sugar rush on a child) and after the sugar wears off there is a crash….Well, as expected, here it is…

Today’s existing home sales report from theNational Association of REALTORS(R) shows existing home sales in St. Louis for July decreased 36.1 percent from a year ago.  For the  US as a whole, existing home sales in July were at at a seasonally adjusted-annual rate of 3.83 million units which is a decline of 27.2 percent from June and is a decline of 25.5 percent from a year ago.

Prices drop slightly from June – up slightly from a year ago-

The median existing home price in St. Louis for July was $147,700, an increase of 3.0 percent from a year ago.  The median home price in the U.S. in July was $182,600 a slight decrease from Junes’ median price of $183,000 an increase of 0.7 percent from a year ago when the median price was $181,300.

Inventory levels increase-

The number of existing homes on the market increased in June by 2.5 percent to 3.984 million homes, but is down 1.9 percent from a year ago when there were 4.062 million homes for sale. Based upon the current sluggish rate of sales the supply that this inventory translates into shot up by 40 percent to 12.5 months from 8.9 months in June.

Metro Home Sales and Prices –

NAR publishes existing home sales for 20 major metropolitan areas of the U.S. Highlights from that report include:

  • None of the 20 metro areas saw increased sales in July from the year before…in fact, all 20 metros saw double-digit decreases in sales in July 2010 vs July 2009.
  • Miami/Ft Lauderdale, FL had the lowest decrease in sales from a year ago with a 14.6 percent decrease in July.
    • Indianapolis, IN had the second lowest decrease with a 15.0 percent decrease in July from a year ago.
    • San Diego, CA came in with the third lowest year-over-year decrease in July with a decrease of 15.2 percent.
  • Eight of the metros had a decrease in home prices from July 2009 to July 2010 with Atlanta being the only metro with a double digit decrease at 11.4 percent.
    • New York saw the largest one-year increase in home prices with a 4.9 percent increase.
    • San Diego came in second with a 4.6 percent increase in home prices.
    • Washington DC had a 4.0 percent one -year increase in home prices making it the third highest in the US.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

I don’t like “seasonally adjusted rates of sales”:

If you have been reading my posts for a while you know by now I don’t like “seasonally adjusted” numbers when artificial stimuli, such as homebuyer tax-credits, can cause an unseasonal spike in sales activity. I much prefer to see the actual numbers and try to garner from them what is going on in the housing market.

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

  • There were 389,000 existing homes sold in July which is a 29.9 percent decrease from June and a 26.9 percent decrease from a year ago.
  • Below are highlights from each region:
    • Northeast – 71,000 homes sold in July, a decrease of 25.3 percent from June and a decrease of 32.4 percent from the year before.
    • Midwest – 83,000 homes sold in July, a decrease of 36.6 percent from June and a decrease of 34.6 percent from the year before.
    • South – 150,000 homes sold in July, a decrease of 26.8 percent from June and a decrease of 21.1 percent from the year before.
    • West – 85,000 homes sold in July, a decrease of 31.5 percent from June and a decrease of 22.7 percent from the year before.

Other highlights of the NAR Report:

  • Distressed sales accounted for 32 percent of all home sales in July, the same as June.
  • First-Time homebuyers accounted for 38 percent of the home sales in July, down from 43 percent in June.
  • Investors were the buyers of 19 percent of the homes in July, up from 13 percent in June.
  • Repeat home buyers were responsible for approximately 43 percent of July’s sales down slightly from 44 percent in June.

My Take On the Numbers:

I’ve been saying it for some time….the tax credits and other stimulus were nothing more than a band-aid and did not fix the underlying problems with the housing market which, in my opinion, include; the general economy, unemployment and under-employment, concern about our country, it’s leadership and where we are headed and finally, a general sense of concern and unrest among people. Until there are some dramatic changes in these areas I wouldn’t expect to see a sustainable recovery of the housing market.


Print Friendly, PDF & Email

Comments are closed.