July home sales dropped 12.7% from the previous month, according to a RE/MAX survey of 53 cities released Thursday. The real estate company blamed tightened lending standards, concern about the overall economy and bad appraisals that reportedly killed many transactions – a notion many in the appraisal business balked at. The National Association of Realtors pointed to similar predicaments when it reported existing home sales dropped 3.5% in July. RE/MAX also said many lenders are already using the lower loan limits for government guaranteed or insured mortgages set to take effect in October. Still, sales remained 13.1% above levels measured one year ago, and the median price dropped 4.6%, the smallest yearly decline in six months. Prices actually increased in four of the last five months, allowing Margaret Kelly, the CEO of RE/MAX to stay optimistic, while others are not. “The fact that July home sales were higher than a year ago, and by such a significant amount, gives us reason for great optimism,” Kelly said. “And now that prices have risen for four of the past five months, the housing market is beginning to show definite signs of recovery.” July marked the first month since September 2010 when the average days on market for homes sold dropped below 90 days. In July, it averaged 88. The 53 metro areas averaged an inventory of homes that would take 7.2 months to work through, down only two-months worth of supply from one year ago. Write to Jon Prior. Follow him on Twitter @JonAPrior
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