Exisiting Home Sales Fall 15.9%

“NAR site is a disaster — no press release, Proxy Errors, etc. ”

Maybe their headquarters got foreclosed on?

Original Release – feel free to delete.

May Existing-Home Sales Show Modest GainLast update: 6/26/2008 10:18:00

AMWASHINGTON, June 26, 2008 /PRNewswire-USNewswire via COMTEX/ —

Sales of existing-home sales increased in May with buyers responding to lower home prices, according to the National Association of Realtors(R).

Existing-home sales — including single-family, townhomes, condominiums and co-ops — increased 2.0 percent to a seasonally adjusted annual rate(1) of 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the 5.93 million-unit pace in May 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said buyers are seeing value in the current housing market. “Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” he said. “Today’s buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth.”

The national median existing-home price(2) for all housing types was $208,600 in May, down 6.3 percent from a year ago when the median was $222,700. Lawrence Yun, NAR chief economist, said there’s still a lot of inventory in the market. “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” he said. “Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”

Total housing inventory at the end of May fell 1.4 percent to 4.49 million existing homes available for sale, which represents a 10.8-month supply(3) at the current sales pace, down from a 11.2-month supply in April. Although conditions remain mixed around the country, unpublished snapshot data shows a number of areas are experiencing much higher sales activity than May 2007, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich. “Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing,” Yun said. “It’d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.04 percent in May from 5.92 percent in April; the rate was 6.26 percent in May 2007. Single-family home sales rose 1.6 percent to a seasonally adjusted annual rate of 4.41 million in May from 4.34 million in April, but are 14.5 percent below the 5.16 million-unit pace in May 2007.

The median existing single-family home price was $206,700 in May, which is 6.8 percent below a year ago. Existing condominium and co-op sales increased 5.5 percent to a seasonally adjusted annual rate of 580,000 units in May from 550,000 in April, but are 24.6 percent lower than the 769,000-unit level a year ago. The median existing condo price(4) was $223,400 in May, down 2.1 percent from May 2007.

Regionally, existing-home sales in the Midwest rose 5.5 percent in May to a pace of 1.16 million but are 16.5 percent lower than a year ago. The median price in the Midwest was $165,300, which is 0.7 percent below May 2007. In the Northeast, existing-home sales rose 4.6 percent to an annual rate of 910,000 in May, but are 15.0 percent below May 2007. The median price in the Northeast was $278,000, down 2.4 percent from a year ago. Existing-home sales in the West increased 2.0 percent to an annual pace of 1.02 million in May, but are 12.8 percent below a year ago. The median price in the West was $286,600, which is 16.0 percent lower than May 2007. In the South, existing-home sales slipped 0.5 percent to an annual rate of 1.91 million in May, and are 17.0 percent below May 2007. The median price in the South was $175,000, down 4.3 percent from May 2007.

The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Notes: (1) The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns. Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample — nearly 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions. (2) The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported. (3) Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982). (4) Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. Existing-home sales for June will be released July 24, and the next Forecast/Pending Home Sales Index is scheduled for July 8. Information about NAR is available at . This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Sales rose in May, as expected, but that leaves sales bumping along the bottom, below the pace in February and up just 2% from April’s pace, which matches the low for the downturn. Sales of single-family homes continue in a range not otherwise seen since 1998. In new home sales, there was no spring bounce. Sales before seasonal adjustment are essentially flat vs winter for new home sales. Existing home sales have had a more normal seasonal lift, but from a very depressed level, which is why after seasonal adjustment they look about flat vs winter months. There has also been a 3-month rise in median prices for used homes, which is rather common for this time of year. Used home prices typically rise from March through June. On a y/y basis, prices were off 6.3%, vs the record 8.5% drop in April. So far, that should be seen as a one-month blip.

That GM number is scary.

Question– If so much of the sale activity was from short sales or foreclosure property being dumped, why don’t we see an accelerated rate of decline in prices? The average prices in the NAR data seemed to have flattened out over the last few months. In fact, looking at their charts, it seems the low point in prices came in February. Or am I reading that wrong?

I never watch Larry’s show, but one of his brief mid-day promos today trumpeted that “Home Sales are Up!” as one of the discussion points.

Guess if you filter the data carefully enough you can find one irrelevant month-over-month number to justify your pre-ordained point of view that everything’s OK.

Alternate universe indeed.

-btc