Today’s existing home sales report from theNational Association of REALTORS(R) shows existing home sales in September were at at a seasonally adjusted-annual rate of 4.53 million units which is an increase of 10.0 percent from August but is a a decline of 19.1 percent from a year ago.

Prices drop for third consecutive month in September-

The median home price in the U.S. in August was $171,700, a decrease of 3.3 percent from August’s revised median price of $177,500 and a decrease of 2.4 percent from a year ago when the median price was $175,900.

Inventory levels decrease for the month- still up from a year ago-

The number of existing homes on the market decreased in September by 1.9 percent to 4.04 million homes, but is up 8.9 percent from a year ago when there were 3.71 million homes for sale. Based upon the current rate of sales the supply that this inventory translates into dropped by 10.8 percent to 10.7 months from 12.0 months in August, but is still 33.8 percent higher than a year ago when the supply was only 8.0 months.

Metro Home Sales and Prices –

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

• None of the 20 metro areas saw increased sales from the year before…in fact, all but 2 of the 20 metros saw double-digit decreases in sales in September 2010 vs September 2009.
• Miami/Ft Lauderdale, FL had the lowest decrease in sales from a year ago with a 6.7 percent decrease.
  • San Diego, CA had the second lowest decrease in sales from a year ago with a 9.1 percent decrease.
  • San Antonio, TX had the third lowest decrease with a 10.7 percent decrease from a year ago.
• Thirteen of the metros had a decrease in home prices from September 2009 to September 2010 led by Atlanta with a decrease of 11.2 percent. Phoenix came in a close second with a 11.0 percent decrease in home prices.
  • Philadelphia saw the largest one-year increase in home prices with a 4.3 percent increase.
  • Washington, D.C. came in second with a 4.0 percent increase in home prices.
  • Boston had a 3.3 percent one -year increase in home prices making it the third highest in the US.

Lawrence Yun, NAR chief economist, said the housing market is in the early stages of recovery. “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

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 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 379,000 existing homes sold in September which is a decrease of 8.5 percent from August and a 19.0 percent decrease from a year ago.
• Below are highlights from each region:
  • Northeast – 64,000 homes sold in September, a decrease of 12.3 percent from August and a decrease of 20.0 percent from the year before.
  • Midwest – 82,000 homes sold in September, a decrease of 1.2 percent from August and a decrease of 25.5 percent from the year before.
  • South – 148,000 homes sold in September, a decrease of 9.2 percent from August and a decrease of 15.9 percent from the year before.
  • West – 85,000 homes sold in September, a decrease of 10.5 percent from August and a decrease of 16.7 percent from the year before.

Other highlights of the NAR Report:

• Distressed sales accounted for 35 percent of all home sales in September, an increase from 34 percent in August.
• First-Time homebuyers accounted for 32 percent of the home sales in September, up from 31 percent in August.
• Investors were the buyers of 18 percent of the homes in September, down from 21 percent in August.
• Repeat home buyers were responsible for approximately 50 percent of September’s sales, an increase from 48 percent in August.

My Take On the Numbers:

I think the overall U.S. housing market has, on average, more or less found it’s “bottom” in terms of sales. I think we are going to see sales rates bounce up and down as we go forward moving toward a somewhat sluggish recovery and, along the way, we are going to see more price movement as the market demands. In the short term, I think we are going to see some more price degradation in many markets, but my expectation would be at modest levels, before leveling off.