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August 2009 National Housing Sales & Price Data

Pete Flint, Real Estate Pro in San Francisco, CA
Written by Pete Flint, Real Estate Pro in San Francisco
September 24, 2009 7:54 AM Market Conditions
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I was reviewing the latest national housing numbers and thought I'd summarize some of my thoughts on what is going on.
Firstly the data:
  • The recent rally in home sales has slowed, down 2.7% for July to August, but up 3.4% over the year
  • Home prices also fell down 2.1% month to month, down 12.5% for the year
  • 30% of sales are from first time home buyers, 31% are distressed properties
  • Inventory levels are falling down to 8.5 months, down from 9.3 in July 2009 and 10.6 from a year ago.
Some charts:




My perspective:
  • Sales Volume: I don't think the month to month dip in sales is a significant negative for the market as a whole. As you can see from the above numbers, July was a surprisingly strong month, driven no doubt in part by the first time home buyer tax credit expiring at end of Nov. It feels like we're making slow, but steady progress towards recovery and these month to month variations are natural. I don't expect a big jump in the near term.
  • Sales Prices: With so many challenges in the overall economy, it is tough to expect any significant positive changes in prices in the near term. The recent run up has stopped and I can see prices bouncing along the bottom for some time to come. I'm positively surprised that months inventory has fallen to 8.5 months, which means that excess inventory that has been pushing prices down is being taken off the market. We are not far from bottom, but with so many foreclosures to hit the market and large amounts of negative equity and unemployment, home prices will probably fall a little more before stabilizing.
All this said, national real estate data is not that useful for home buyers and sellers, it is the local real estate data that give the real picture. So go, check out Trulia's local real estate statistics.
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Comments

By Nick Vandekar,  Thu Sep 24 2009, 09:23
I see nothing wrong as a realtor for there to be a long slow recovery. The first time buyer credit pulled lots of buyers forward who wanted to take advantage of the credit. That has been good to clear excess inventory, but we must remember a house is primarily a home, a place of refuge from the world, a place of safety for your family, a place to stay dry, cool or warm, a place to entertain. it is NOT an investment and a way to make money in the short term.
By Pete Flint,  Thu Sep 24 2009, 12:00
Thanks Nick for the comment.
Certainly a stable recovery, built on a solid foundation (albeit at a lower level) is tough to swallow, but good for us all!
Good to see there are many more rational people in the market today.
Pete

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