Monday, August 25, 2008

National July Sales and Inventory Rise, According to NAR

According to the National Association of Realtors, sales of existing houses rose 3.1% in July. However, the number of houses for sale increased as well, up 3.9%. Of course, many of these sales are Foreclosure sales--as are many of the additions to inventory.

Good news? For whom? For everybody who sold a house...but not for those still waiting to sell. Good news for those who are waiting to buy, however. The increased inventory will push house prices down even further. The median price for a previously owned house fell in July to $212,400 from $215,100 in June. Last month’s price was 7.1 percent below the level in July 2007.

There is currently an 11.2 month supply of existing houses nationwide--meaning it would take this long to sell off the houses. We still have a ways to go.

And while lower prices could spur sales, they also cut into current owners’ equity and household worth. As we know from a report earlier this month, nearly 1/3 of homeowners who have bought in the past five years now owe more than their houses are worth.

Are all housing markets are regional?

While this is sometimes accurate, the local sales tell much the same story as the national ones. And August is almost over: we'll know in the beginning of September what the final results of the Summer Selling Season are.

The Charlottesville/Albemarle Bubble has been slower in correcting itself than others; there are still agents and sellers here who haven't received the memo that it's 2008, or looked into the chaos of the national economy, or even what's happening on a state and local level. Many still believe the Myth of the Protected Market, and are proselytizing as such. Our numbers, however, tell a different story than that of the optimists.

In our area,
as of mid-year 20008, there was 9.8 months of inventory on the market; the median price for C'ville was $265K & Albemarle $320,200K. As of the beginning of July, there were 2595 properties on the market in the Charlottesville area, and 239 sold in July 2008, when the area is defined as Albemarle, Charlottesville, Fluvanna, Greene, Louisa and Nelson. There are more when you take into account the further regions ("The Vallye"), and this is the number reflected on the CAAR homepage ( which states that as of the end of July, there were 3,688 available. (These numbers are the same as those that were attached to our "mid-year" post, and courtesy REALCentralVA.)

Additionally, there's the shadow inventory: houses that are in default right now and will be added to the market in foreclosure soon. There are also houses that are being pulled off the market because they haven't sold (and sellers instead of dropping prices are "waiting out the market") and/or renting--becoming "accidental landlords."

Good time to buy? If you make sure your offer is low and your house isn't worth less than you owe the second month of your mortgage....

And in terms of new house building? The WSJ has a caution: That Housing Recovery? Keep Waiting, says the WSJ, and goes on to detail the woes of new housing builders exchange-traded funds.

1 comment:

Anonymous said...

...that is, IF you believe a word that NAR says