Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for July further confirming a continuation of the tremendous weakness in the demand of existing residential real estate with sales of both single family homes and condos declining nearly uniformly across the nation’s housing markets while inventory and supply continues to climb.Although this continued falloff in demand is mostly as a result of the momentous and ongoing structural changes taking place in the credit-mortgage markets, consumer sentiment surveys are continuing to indicate that consumers are materially feeling the current stagflationary trends which will likely result in even further significant sales declines to come.
Furthermore, we are continuing to see SOLID declines to the median sales price for both single family homes and condos across virtually every region.
As usual, the NAR leadership continues spinning the results suggesting that the uptick in sales seen in California and Florida are indicating recovery.
“Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time, … Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”
What NAR forgot to mention is that roughly 30% of all home sales in California are the result of foreclosures.
Distressed selling will inevitably result in continued price declines which then results in more distress perpetuating the vicious cycle.
Keep in mind that these declines are coming “on the back” of TWO SOLID YEARS of dramatic declines further indicating that the housing markets are truly in the process of a tremendous correction.
The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007 and 2008 as well as national existing home inventory and month supply.
Below is a chart consolidating all the year-over-year changes reported by NAR in their most recent report.
