The national housing market
Today was a big day for reports on the state of the housing market on a national basis. I suppose I am a little spoiled because within the first few days of the month, I can gather all the statistics on the Charleston South Carolina real estate market and report to you via the Charleston real estate blog. And housing is always local, not national, though reports from the media might make you think otherwise.
I stopped in a store today where I am fairly well known and the sales clerk who knows I'm in real estate asked me how the real estate business really was. Thankfully, I'm still doing very well and the Charleston market is holding up rather well despite reports to the contrary. As I have documented on many occasions, the sky is not falling, the world as we know it is not ending and despite inventory and mortgage problems, real estate is still selling.
So despite the fact that much of this news is a little old but still being reported freshly today, courtesy of Marketwatch, national sales and inventory statistics and prices from the 20 largest markets, most of it bad.
Some highlights.
"In a sign that the housing slump is far from over, home resales slipped for the sixth month in a row in August as the credit squeeze forced many sales to fall through, the National Association of Realtors reported Tuesday. With sales of existing homes falling 4.3% to a five-year low seasonally adjusted annual rate of 5.50 million in August, inventories of unsold single-family homes rose to an 18-year high.
Meanwhile, a separate gauge of home prices fell for the 12th straight month in July, with prices falling in 15 of 20 major cities over the past year. Prices in 10 major cities are falling at the fastest pace in 16 years.
The news from the housing market wasn't comforting. Sales of existing homes fell in all four regions, dropping 9.8% in the West, 5.2% in the Midwest and 2.7% in the South and 2% in the Northeast. Sales of single-family homes fell to a 10-year low in the once-booming West. Nationwide, sales of existing homes were down 12.8% in August compared with August 2006. Sales of single-family homes dropped 3.8% to a 4.81 million annual pace, the lowest since August 2002. Condo sales fell 8% to a 690,000 pace annualized, also a five-year low.
The drop in sales was close to expectations. The glut of unsold homes on the market will put further pressure on prices and new construction, said David Greenlaw, an economist for Morgan Stanley. Prices will likely have to fall further to bring the rising supply and weakening demand back into balance.
Inventories of unsold existing homes on the market rose by 0.4% to 4.58 million, representing a 10-month supply at the August sales rate, the realtors said. For single-family homes alone, the inventory represents a 9.8-month supply, the most since May 1989. Inventory data are not seasonally adjusted.
"The credit-market freeze in August no doubt contributed to the decline in sales," said Lawrence Yun, senior economist for the real estate trade group. Many loans that had been committed to fell through, Yun said, so the sales couldn't close. Existing-home sales are measured at closing.
The increase in inventories was driven mostly by lower sales, not by more supply hitting the market. In unadjusted terms, 596,000 homes were listed for sale for the first time in August, the fewest listings for any August in seven years, Yun said. In recent years, about 700,000 or 800,000 homes would be listed in a typical August. Yun said he expected further sales declines in September, but noted that mortgages have become more affordable and more available since the worst days of August. The median sales price was $224,500, up 0.2% since August 2006. Single-family median prices were unchanged year-over-year at $223,900.
Earlier Tuesday, Standard & Poor's said the Case-Shiller home-price index for 20 major cities fell 3.9% compared with a year earlier. For the 10-city index, the 4.5% price drop in the past year is the biggest since 1991. The Case-Shiller index is not affected by the mix of homes sold in a period, since it compares sales prices of the same homes over time. There's no end in sight to the housing slump, but it's not a disaster for most homeowners, said Robert Shiller, chief economist for MacroMarkets LLC. Prices are lower in 15 of the 20 sities compared with a year ago, according to Case-Shiller. The worst declines are the Rust Belt and the formerly boom towns along the coasts. Prices are holding up in the Pacific Northwest and in areas of the South."
The complete story is available from Marketwatch. Please note the South and the Charleston South Carolina real estate market is holding up rather well compared to the industrial Midwest and the boom towns of the real estate frenzy of the past few years.