NAR: Resale home prices, sales fall
California median price drops a record 40.3% in July
By Inman News, Monday, August 25, 2008.The sales rate for of U.S. resale homes dropped 13.2 percent in July compared to the same month last year, and the national median price dropped 7.1 percent, the National Association of Realtors reported today.
In California, meanwhile, sales of single-family resale homes soared 43.4 percent year-over-year in July while the median price sank a record 40.3 percent, the California Association of Realtors trade group reported in a separate announcement.
NAR reported that the seasonally adjusted annual rate of U.S. single-family home sales, including townhomes, condos and co-ops, reached 5 million in July, which is up 3.1 percent compared to June but down from the rate of 5.76 million units in July 2007.
For-sale housing inventory reached a level of 11.2 months in July. A for-sale inventory of six months is generally considered to represent a market equilibrium, with higher inventory levels representing a buyer's market and lower inventory levels representing a seller's market.
Single-family sales were down 12.4 percent year-over-year in July, while condo and co-op sales fell 18.6 percent, the median single-family price fell 7.7 percent and the median condo price dropped 2.7 percent.
Regionally, the rate of all resale home sales rose 0.9 percent in the West year-over-year in July while the median price dropped 22.2 percent. Sales in the Northeast were down 11.8 percent while the price was down 4.9 percent. The sales rate dropped 17 percent and the median price fell 1 percent in the Midwest, and the sales rate slipped 18.1 percent while the median price dropped 3.5 percent in the South, NAR reported.
In California, CAR President William E. Brown said in a statement that sales of distressed homes and a rise in the conforming loan limit helped to spur sales there.
"Deeply discounted, distressed sales continue to drive volume in many regions of the state," Brown stated.
Closed escrow sales of single-family resale detached homes reached a seasonally adjusted annual rate of 489,080 in July, the association reported, up from a pace of 341,130 sales in July 2007.
Meanwhile, the median single-family detached home price plunged from $587,560 in July 2007 to $350,760 in July 2008, a record that tops the previous year-over-year drop of 37.9 percent set in June 2008.
An index that measures the number of months needed to deplete the supply of for-sale homes given a monthly sales rate stood at 6.7 months in July, down from 10 months in July 2007.
The association reported a 15.9 percent rise in the sales rate for condos in July compared to the same month last year, and a 24.9 percent drop in the median condo price.
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Submitted by Mark Williams on August 25, 2008 - 1:29pm.
I am surprised to see Inman News doing the same thing that major media is doing - the headline of the above story is a negatively biased overview of the actual article. NAR reports sales increased 3.1% from June to July and the headline addresses the year over year drop -and ignores the 43% increase in CA sales volume.
Submitted by Ki Gray on August 25, 2008 - 4:53pm.
"resale homes dropped 13.2 percent in July compared to the same month last year"
When is this going to end. I was hoping by now things would start to improve.
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Submitted by Jack McCabe on August 25, 2008 - 5:31pm.
Regarding Mark Williams comment above- no, the headline and importance of this data is not that sales increased by 41%, it's that prices have dropped 40.3% in ONE YEAR. Sales wouldn't have increased without the more affordable home prices.
When one in every three sales in California in 2008 is a foreclosure sale, we still have people begging for positive spin headlines as if it will change buyers perception of reality. The absolute failure of the NAR as a spin machine and the obvious lowered esteem and professionalism the public has for realtors should make it obvious that BS and hype don't work.
Besides, this is not a site that genral public buyers and sellers is viewing. Inman News is primarily read and content is geared toward real estate sales people and ancillary businesses.
There has never been a time more important to know the truth and deal with the realities of this historic marketplace.
If you want fluff, read Mary Poppins or Aesop's Fables.
Submitted by Wenceslao Fernandez Jr, BS, Realtor, CDPE on August 25, 2008 - 6:08pm.
Its all about perspective. Sellers want to see it one way, buyers another and agents yet another way. Still, reporters and number crunchers alike will see it all their way too.
The fact remains that, NAR reports that in California, July was an improvement over June, and that July 2008 sales was an improvement over July 2007. All this while the numbers look much different on a national level, proving once again that real estate is local.
They could have also published how in some states, things are quite rosey, but nobody would read it.
Lower prices are dissapointing in California, but properties are selling, eating up some of that excess inventory (market fat), that continues to erode the market.
Until prices begin to stabilize (and I must concede that, it may take quite a while - at least until after the elections or even, the new president's inauguration), we will continue to see a downward spin on prices while sales improve.
At some point, we will find equilibrium. At some point, inventories will begin to level off, allowing for the best properties to be bid up as buyers fight for them under the stress of lower inventory levels. Of course, when that point will come, is anyone's guess.
The bottom line to me is that, although we must continue to struggle with the harsh realities of today's market, one could also rejoyce in the small indicators that may be pointing to a less jagged bottom, and a certain recovery...as it always does.
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