I ran across this report that I wanted to share.
Existing Home Sales - September Report
Last Updated: 9/7/2007
Home Sales Pace Summary
Sales of existing homes were down very slightly in the most recent data released by the National Association of Realtors. The decline was 0.17% to an annual pace of 5.75 million homes. Last month's figure was 5.76 million homes.
This reflects the activity of July closed sales. August sales data will be released near the end of September.
Most problems in the housing industry right now, as we've been saying for months, has little to do with the sales pace, but the fact that there are just too many homes on the market. We'll discuss that more below.
Sales Pace by Region - Month to Month
For month to month comparisons, the West region showed a gain of 1.82% and the Northeast showed an increase in sales, up .99% from last month. Sales in the South were flat (no higher, no lower) and sales in the Midwest declined by 2.17%.
Comparing sales to last year reveals a different story. Nationwide, sales were down just over 9%, with the sharpest decline in the West (-15.15%). Sales declined in the South by 10.67%, the Midwest by 5.59%, and only declined 2.86% in the Northeast.
The above figures are seasonally adjusted and based on how many homes would sell over a year's time at the current sales pace.
August figures will be released near the end of September.
Nationally, the median average sales price decreased slightly compared to last year, down just over a half percent (0.56%) to $228,900. Since the early sixties when experts began tracking this data, there has never been a year when the national median average price decreased. It won't be until late January 2008 that we will get definitive figures on price appreciation for 2007.
The Northeast showed an increase of 5.94% in value and the West increased .92%. The Midwest declined by 1.81% and the South fell by 3.22%.
The biggest problem with declining values is not the lack of buyers or slower sales. We are still above the sales pace of 2002 when values increased approximately 7%. The problem is oversupply of inventory (see below).
We compare values to the same period a year ago, because month-to-month there are sometimes huge fluctuations in the size of houses that sell. Larger houses sell during the summer when it is more convenient for families to move because school is out.
Median Average
The median average is the "midpoint" sales price. Half the home were sold above that price and half below.
Inventory Still Growing
The actual number of homes for sale in July grew by 224,000 to almost 4.6 million homes on the market. At the current sales pace, it would take 9.6 months to sell all those homes. That is a phenomenally high level of inventory.
During 2002 when the sales pace was close to what it is now, there were only approximately 2.1 million homes for sale at a given time. That year, the median average price increased by almost 7%.
Inventory is measured in two ways. "How many homes are available for sale?" and "How many months would it take to sell the total number of homes available for sale right now, at the current sales pace?"
Home Sales Pace Defined
We generally report on the annual sales pace. What that means is that the National Association of Realtors calculates how many homes were sold, makes adjustments for seasonal factors like weather, school, vacations, and calculates how many homes would sell in a year at that given pace. When we use raw data, we try to state that clearly.
All figures in this report are for July closings. August figures will be released near the end of September.
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