Friday, August 21, 2009

Existing Home Sales Report: July 2009

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for July showing a significant jump in sales for both single family homes and condos while median prices continued to decline.

Existing single family home sales were up 5.0% on a year-over-year basis while the median selling price declined 14.6% over the same period.

More notably though, Condo sales jumped 5.9% on a year-over-year basis while median selling prices declining 18.9% over the same period.

It’s important to note that the “Cash for Clunkers” of housing, the “first time home buyers” tax credit, is likely driving the current jump in sales.

While the government assistance program is temporary, today’s results appear to indicate that home sales may be buffeted throughout its term which, short of being extended, expires in November.

In any event, like the “cash for clunkers” program all this incentive is likely doing is moving 2010 sales into 2009 and even encouraging more inventory as the sense of a market bottom bolsters banks and other sellers currently on the sideline with units to sell.

Of course, the NAR leadership is taking advantage of today’s results, applauding the widespread use of government assistance to bailout the real estate industry with chief economist Lawrence Yun suggesting:

“The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales”

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.