The NAR published their quarterly home sales report this past week which shows the rate of home sales for all 50 states as well as the District of Columbia.
Of the 51 total markets, 41 of them showed year over year home sales declines from the 2Q of 2008 to the 2Q of 2009.
The year over year data, the weather man's guide, is a better indicator than month over month data as it accounts for seasonal variances as well as providing a larger scope to interpret the information, in other words, a frame of reference. It is this year over year perspective that is often swept under the carpet by the media when reporting on the economy and housing market.
The only markets to see year over year increases in home sales were Arizona (41.5%), California (20.8%), District of Columbia (5.6%), Florida (20.9%), Iowa (1.6%), Maryland (4.4%), Michigan (10.0%), Minnesota (12.7%), Nebraska (6.4%), and Nevada (76.8%). Not surprisingly, the places with the largest increases in home sales were also the same places with the most significant declines in home values.
In other words, despite the Fed's efforts to plunge mortgage rates and the governments $8,000 first time home buyer tax credit, the primary driver of home sales continues to be home value declines. The governments housing stimulus plans are not positively impacting demand for most of the markets in the country.
Broadly speaking, the NAR report showed that nationally home sales fell -2.9% from the 2Q of 2008 to the 2Q of 2009. Interestingly, of the four major regions, only one showed an increase in home sales, the West, by 11.8%. In the Northeast, the Midwest, and the South, home sales were down -8.4%, -5.3%, and -7.2%, when compared to the previous year.
What this report reveals is that as foreclosures are on the rise throughout the country due mounting job losses, demand in the majority of markets remains insufficient in dealing with the problem. According to RealtyTrac, individual property foreclosure filings were up 20.3% during the first half of 2009 when compared to the first half of 2008. On the other hand, using the NAR data for first half of 2008 and the first half of 2009, it reveals that home sales are down by -5%. This supply and demand imbalance means that home values are going to erode further.