Existing home sales in August improve slightly reaching second-lowest rate in over fourteen years

Dennis Norman

Dennis Norman

After July’s existing home sales fell over 27 percent and hit ROCK BOTTOM, August didn’t fare much better…..

Today’s existing home sales report from theNational Association of REALTORS(R) shows existing home sales in August were at at a seasonally adjusted-annual rate of 4.13 million units which is an increase of 7.6 percent from July’s dismal rate but is a a decline of 19.9 percent from a year ago and the second-lowest sales rate in over 14 years (July was the lowest).

Prices drop  again in August – still up slightly from a year ago-

The median home price in the U.S. in August was $178,600 a decrease of 1.9 percent from July’s median price of $182,100 an increase of 0.8 percent from a year ago when the median price was $177,200.

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

The number of existing homes on the market decreased in August by 0.6 percent to 3.982 million homes, but is up 1.5 percent from a year ago when there were 3.924 million homes for sale. Based upon the current rate of sales the supply that this inventory translates into dopped by 7.2 percent to 11.6 months from 12.5 months in July, but is still 26.1 percent higher than a year ago when the supply was 9.2 months.

Metro Home Sales and Prices –

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

  • Again in August, none of the 20 metro areas saw increased sales from the year before…in fact, all but 4 of the 20 metros saw double-digit decreases in sales in August 2010 vs August 2009.
  • San Diego, CA had the lowest decrease in sales from a year ago with a modest 1.0 percent decrease.
    • Miami/Ft Lauderdale, FL had the second lowest decrease in sales from a year ago with a 3.7 percent decrease in August.
    • San Antonio, TX had the third lowest decrease with a 6.8 percent decrease in August from a year ago.
    • Washington D.C. came in with the fourth 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 August 2009 to August 2010 with Atlanta for the second consecutive month being the only metro with a double digit decrease, this month at 14.3 percent.
    • San Antonio saw the largest one-year increase in home prices with a 7.5 percent increase.
    • Philadelphia came in second with a 6.8 percent increase in home prices.
    • Washington DC had a 5.4 percent one -year increase in home prices making it the third highest in the US.

Lawrence Yun, NAR chief economist, said home sales still remain subpar. “The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty,” Yun 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 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 414,000 existing homes sold in August which is an increase of 5.9 percent from July and a 17.0 percent decrease from a year ago.
  • Below are highlights from each region:
    • Northeast – 71,000 homes sold in August, a decrease of 2.7 percent from July and a decrease of 22.8 percent from the year before.
    • Midwest – 84,000 homes sold in August, an increase of 1.2 percent from July and a decrease of 24.3 percent from the year before.
    • South – 165,000 homes sold in August, an increase of 10.0 percent from July and a decrease of 11.3 percent from the year before.
    • West – 94,000 homes sold in August, an increase of 10.6 percent from July and a decrease of 14.5 percent from the year before.

Other highlights of the NAR Report:

  • Distressed sales accounted for 34 percent of all home sales in August, an increase from 32 percent in July.
  • First-Time homebuyers accounted for 31 percent of the home sales in August, down from 38 percent in June.
  • Investors were the buyers of 21 percent of the homes in August, up from 19 percent in July.
  • Repeat home buyers were responsible for approximately 48 percent of August’s sales, a significant increase from 43 percent in July.

My Take On the Numbers:

I would say the ground hog did not see his shadow……relief will not come early from this distressed housing market.


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