US Existing Home Sales Down 9.6% From August

HOME SALES CRASHED IN SEPT posting their largest one month fall in a year. Today’s Existing Home Sales numbers released showing sales up 5.1% were ANNUALIZED, which is not how you have to look at this dynamic market. Month over month reflects the truth about this market. Sept 07 was before the ‘new normal’.

Look below at NAR’s chart. In reality, home sales FELL considerably from August, down 9.6%. Prices fell as well, putting millions of home owners into a negative equity or deeper negative equity position, exponentially increasing their likelihood of loan default.

As prices fall sales should increase not fall 10%.  As sales fall, inventories should increase not decrease. The reason inventories decreased is because as values fell, people pulled their listings realizing they will not sell for what they owe.

You can’t even compare last Sept with this Sept. Remember, last Sept home sales fell the most in one month in history as lenders pulled out of the market at the same time making it a very easy benchmark to beat. See my recent report on the CA spin.  A ‘new normal’ began after Sept 2007, which is where meaningful analysis must begin.

So many things are different now, such as last year foreclosure related sales made up 5% of the market and now they make up 60% is some states. In addition, last summer home prices were at their peak. Peak home prices with very little financing choices does not move homes. Last year’s data can’t be used for meaningful analysis.

You have to look at multi-month trends and it is obvious by the chart below, home sales are falling as prices are falling. So are organic sales. When you back out foreclosure related sales, organic home sales are at multi-decade lows proving 10s of millions of Americans are underwater, stuck in their homes and unable to move.

Data below from NAR site.

Note: See NOT SEASONALLY ADJUSTED in the right box. ALL areas lower and nationally lower by nearly 10%!

Subscribe by RSS Subscribe by Email