June Existing Home Sales Data Shows Declining Market

The National Association of Realtors just released their June 2006 existing home sales data.

Existing-home sales were down modestly in June, and home prices were up slightly from a year ago, according to the National Association of Realtors

Sounds pretty decent. Hold your horses there are many negative numbers in this month's data.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops declined 1.3 percent to a seasonally adjusted annual rate of 6.62 million units in June from an upwardly revised level of 6.71 million May. Last month'’s sales were 8.9 percent below the 7.27 million-unit pace in June 2005.

Home sales last month were down basically 9% compared to last year across the US. In the bubble markets the decline is even greater.

The national median existing-home price for all housing types was $231,000 in June, up 0.9 percent from June 2005 when the median was $229,000.

Technically the .9% increase in the median sales price for existing homes is 'up.' In real dollars, adjusted for inflation, the median sales price has declined from June 2005. Let's look at housing inventory or housing supply.

Total housing inventory levels rose 3.8 percent at the end of June to 3.73 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace. By contrast, in June 2005, there was a tight 4.4-month supply on the market.

Nationally, inventory up is 39.1% year over year which is a fast pace. In most bubble markets, inventory is exploding. Home sales:

Single-family home sales eased 0.9 percent to a seasonally adjusted annual rate of 5.81 million in June from an upwardly revised 5.86 million in May, and were 8.2 percent below the 6.33 million-unit pace in June 2005. The median existing single-family home price was $231,500 in June, up 1.1 percent from a year ago.

Existing condominium and cooperative housing sales fell 5.5 percent to a seasonally adjusted annual rate of 805,000 units in June from a pace of 852,000 in May, and were 14.6 percent below the 943,000-unit level in June 2005. The median existing condo price was $226,900 in June, down 2.1 percent from a year earlier.

In real dollars the median sales price of both condos and single family homes declined year over year. The numbers for the condo market, for both pricing and number of sales, were weaker then the single family housing market. As the bubble bloggers have been saying, the condo market is more bubblicious then the single family housing market. Looking regionally:

Regionally, existing-home sales in the Midwest were unchanged in June, holding at a level of 1.52 million, and were 6.2 percent lower than a year ago. The median price in the Midwest was $175,000, which is 1.7 percent below June 2005.

Existing-home sales in the West also were unchanged, at an annual pace of 1.41 million in June, and were 17.1 percent lower than June 2005. The median price in the West was $342,000, the same as a year ago.

Existing-home sales in the South eased 2.3 percent to a pace of 2.57 million in June, and were 5.5 percent below June 2005. The median existing-home price in the South was $191,000, down 0.5 percent from a year earlier.

Existing-home sales in the Northeast declined 3.5 percent to an annual sales rate of 1.11 million units in June, and were 9.8 percent below a year ago. The median price in the Northeast was $298,000, up 7.2 percent from June 2005.

This what GAIN Capital had to say in their comments about the existing home sales numbers:

Looking at the breakdown of existing home sales data two key points emerge: 1) inventory of homes for sale has increased to 6.8 months from the 9-year high of 6.4 months in May; and 2) the average price increased only 0.7% MoM, the smallest increase in a long time and well below the 4-5% annual increase over the last six months. So despite the smaller than forecast decline in June existing home sales, the underlying market foundation is likely eroding more quickly than expected and this points to outright average home price declines in the coming months as inventories of unsold homes continues to increase.

Here is More Information data:

National Existing Home Sales (pdf)
Existing Condo & Coop Data by Metro Area (pdf)
"Buyers Market With Plentiful Supply"’: NAR (The Housing Bubble Blog)
NAR: Existing-Home Sales Flattening, Prices Cooling (Calculated Risk)

The NAR chimed in on their findings. NAR President Thomas M. Stevens from Vienna, Va., said opportunities have opened for home buyers:

"Relative to the five-year housing boom, this year is a buyer'’s market in much of the country with plentiful supply, along with interest rates which remain historically favorable, so it'’s a good time to buy a home."”

In the bubble markets prices have doubled to tripled what they were just five years ago. It is always a good time to buy according to the dribble from the National Association of Realtors. They have lost their credibility by cheerleading homebuying at near peak prices.