Tuesday, June 23, 2009

Existing Home Sales Report: May 2009

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for May indicating that home sales declining slightly on a year-over-year basis, despite the significant slide to median selling prices, record low interest rates and significant numbers of speculative sales of distressed properties in the western region.

Existing single family home sales were down 2.97% on a year-over-year basis while the median selling price declined a dramatic 16.07% over the same period.

More notably though, the Condos now seem to have fully tipped into the major decline phase with sales declining 8.9% on a year-over-year basis with median selling prices declining a whopping 21.9% over the same period.

Lastly, the West region, which had since the summer of 2008 looked to be experiencing a market clearing of sorts with surging (mostly distressed) home sales coming on the back of record price declines, is now starting to show some clear signs that it’s housing rally may be drawing to a close.

With the selling price of all housing products continuing to fall at an annual rate of over 30% and regional unemployment near 12% this massive “suckers rally” in residential real estate will deal the West region another serious financial blow.

The NAR leadership continues their truly disgusting and shameless spin with both their chief economist Lawrence Yun and their current president Charles McMillan suggesting that “poor appraisals” are forestalling a “housing recovery”…. For those of you that don’t recognize it… this talk is the simple framing of an appeal (through RPAC the Realtor political action committee) for action from the federal government to contrive the procedures used to conduct fair-market appraisals of residential real estate…

“First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.” Yun said.

“To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist,” McMillan said.

The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007, 2008 and 2009 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.