Observations on NAR's Existing Home Sales Report

By
Real Estate Broker/Owner

The NAR published their monthly existing home sales report on Friday which showed that home sales rose 7.2% in July from June on a seasonally adjusted rate and are up 5% from last year at this same time. 

This is clearly good news as the real estate market needs a massive increase in demand in order to absorb the excess supply of homes that is sitting on the market as well as the foreclosures that are about to hit the market

The interesting statistic within the report that didn't make the headlines but is just as relevant is that housing inventory, the number of homes for sale, also rose 7.3% from last month.  This could be the first indicator that the foreclosures that were held back by the moratoriums that expired in March, may slowly be making their way to the market.  Typically there is a delay in time from when a property is actually foreclosed on to when it goes back up for sale.

The "net" result is that the month's supply of housing, which represents the relationship between supply and demand, remains unchanged from the previous month with a 9.4 month supply.  This month's supply still indicates that home prices are going lower.

As I have written about before, while these increases in home sales are good, they are insufficientin dealing with the number of foreclosures coming to the market.  According to RealtyTrac, foreclosure filings set a new record in July and are up 32% year over year. 

Comments (4)

Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Good observation Mark -- on the stat that got swept under the rug.  So inventory is up . . . too. 

Aug 22, 2009 03:44 PM
Mark MacKenzie
Phoenix, AZ

Thanks Carla for taking the time to read the post. :)

Aug 22, 2009 03:58 PM
Anonymous
amycesario

Mark - So glad you pointed this out.  It was blaring to me and I haven't heard anyone else mention the foreclosures that have come back on after the moritorium in comparison to our sales.  I think we have a few interesting months ahead.  Home prices will go lower when there is too much inventory, this past week in Denver there isn't ANY inventory in some neighborhoods in price ranges that I would like to show, it is important to remember to go local when talking prices.  Thanks for reminding us of the forclosure wave that has started and will be coming!

Aug 22, 2009 04:18 PM
#3
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

It sounds like everyone is trying to clean up hurricane Katrina with one roll of Scott's Paper towel!  It cannot be done by any stretch of the imagination, but instead they publish statistics that offer only a glimmer of good news and neglect the rest of the story.  Sadly, there is no comprehensive reporting any more.

Aug 23, 2009 02:03 AM