E-mail updates
Follow on Twitter
Subscribe to RSSToday’s housing numbers reported by the National Association of Realtors were uniformly awful. July was the worst month for sales of single-family homes since May 1995, the trade group said.
A breakout for 20 big urban markets shows that even the “best” city, San Diego, posted sales that were down 15 percent from a year ago, in July 2009.
In Minneapolis, the worst of the markets, sales were down 42 percent.
Even though sales were down in most markets, the median price was up a bit in some. Boston posted the best result on pricing, with the median price up 7.6 percent over year-ago levels, even as sales of previously occupied homes dropped 26 percent.
In Atlanta, it was the worst of both worlds; sales were down 17 percent and the median price of a home sold fell 11 percent.
The Realtors blamed the sharp drop on the expiration of a federal tax credit early this year. The tax credit clearly juiced sales in late 2009 and early this year. Now that all those deals have closed, sales have fallen off a cliff.
Lawrence Yun, chief economist for the Realtors, tried to put a bit of a positive spin on the report but said the current sales “pause” is likely to last through September.
“However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs," Yun said.
That, of course, is a big if.
Read the full release with a link to city-by-city statistics, here.
http://www.realtor.org/press_room/news_releases/2010/08/ehs_fall
Leave a Comment:
My co-workers are accusing me of being a negative person when I state the facts about the people dying in Pakistan; the high unemployment rate; the fact that the stock market is lower than when Clinton handed off the Presidency to W; the housing market really sucks. Americans generally derived income from their homes and in the market. We are all fooled by believing that two huge office towers had all their equipment and furniture pulverized on 9-11 (which defies logic) I guess I need psychological help.
Martin,
Economists need to look at the bigger picture. Who is going to bring the housing market out of this dip? Back when anyone and everyone could get a loan how many 1st time homebuyers were there compared to today. I would think that there are less 1st time homebuyers today then just 3 months ago. Look at it like this. If they did not buy a house when loans were easy to get, and they did not buy a house when the tax credit was in effect I would say that the odds of them buying a house in the near future are very slim. So this may take that portion of homebuyer out of the market.
Then we have current homeowners, I’m sure that many would like to get another house at the lower prices, but so many homeowners are upside down in their house they can’t get out without emptying their savings account. This money that is needed to sell the house takes way from the money that is now needed for the down payment on the next house. If the homeowner short sells their house they get a ding on their credit, taking them out of the ability to get another mortgage. So this takes current homeowners are out of the picture.
That leaves the ones that experienced financial hardship with the last recession. These people cannot get a loan due to past credit history so they are out of the buying market as well.
So where does this leave us? There are some buyers out there, but one would think that there are not enough buyers to sustain, let alone cause a gain in the housing market.
I figure that it will take 5- 7 years to recover. I feel that the people that have questionable credit today will lead us back into recovery. My thoughts are that they have no mortgage today and they may have the desire to get back into another house. In 5-7 years these people may start to get mortgages again since they had time to rebuild their credit.
Current homeowners may break even on their house, but that is unlikely since there will be minimal demand for their house. The next generation of 1st time homebuyers may crop up, but they will be limited to foreclosures and short sales since current homeowners cannot sell their house due to being upside down.