NAR: August Resales Off 12.8 Percent From Year-Ago Levels
The National Association of Realtors released its existing-home sales report today, which showed a 4.3 percent drop in total existing home sales to a seasonally adjusted annual rate of 5.50 million units in August from a level of 5.75 million in July. The August number is 12.8 percent below the 6.31 million-unit pace recorded in August 2006, the trade group said. The NAR said it "expected the decline," with senior economist Lawrence Yun citing "unusual disruptions in the mortgage market." Yun said he expects further declines during September, but said that he expected the current market disruptions to have receded after that time, making it possible to "get a better sense of where the actual market is" towards the end of this year. While I don't think I need to comment on the utter inanity of arguing that mortgage problems are somehow obscuring "actual" market conditions, the more troubling number in the NAR's report is this: inventory of unsold homes rose 0.4 percent at the end of August to 4.58 million existing homes available for sale, which represents a 10.0-month supply at the current sales pace, up from a 9.5-month supply in July. While prices remained flat, single-family resales fell 3.8 percent during August from July levels, the NAR said, and are 13.0 percent below 5.53 million-unit level in August 2006. Condominium sales fell even further, dropping 8 percent on a monthly basis and remaining off 11.7 percent from year-ago levels. But I'm sure things will look up after September, like Yun says; after all, the growing glut of excess housing supply we're now facing is sure to drive prices up soon. Right after I finish burning every economics textbook ever written. Update: The California Association of Realtors has put out its numbers as well, showing that home sales in the Golden State decreased 27.8 percent during August compared with the same period a year ago, while the median price of an existing home increased 2 percent. I especially like how the CAR reports price per square foot as sort of an equalizing factor. The CAR reported that median price per square foot for a single-family home is on the decline, falling 4.3 percent this year to $336 compared with last year's record high of $351 per square foot.