Home Sales lowest in 15 years
September 3, 2010
In the month of July, occupied home sales fell to the lowest seen in fifteen years, even with the mortgage rates being the lowest seen in years and homes for sale below market value in several areas.
The sales in July decreased over 27% to a seasonally adjusted annual rate of 3.83 million according to the latest report from the National Association of Realtors. This was the largest decrease on records since 1968 with declines recorded all across America.
This drop is adding fuel to the fire when it comes to the economy.
Paul Dales, U.S. economist with Capital Economics, stated, “The housing market is undermining the already faltering wider economic recovery,” and went on to say, “With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse.”
The weakest area for home sales was in the lower to middle price ranges. The Midwest homes priced from $100,000 to $250,000 saw sales drop close to 47%.
The slow selling market has now increased the inventory of homes on the market to around 4 million for the month of July. This is a whopping 12 ½-month supply at the selling rate we are seeing which is the highest levels seen in over ten years. This supply would be for a healthy level a supply of around 6 months.
The main reason this market is in trouble is that homebuyers and home sellers are not getting together on the prices of the homes. Many home sellers are not happy to lower their prices and home buyers are a bit hesitate to buy as they believe home prices have not hit the lowest levels yet.
Aaron Zapata, a real estate agent in Brea, California stated, “It really is a self-fulfilling prophecy,” and “if all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.”
Foreclosures are another reason prices have fallen which is around ten times higher than just before the bust in the housing market. The average rate of a 30-year fixed mortgage dropped to 4.42%, some families are unable to qualify for a home loan as banks have strengthened their lending standards.
During the government tax credits in the spring, home sales were up, however, the tax credits expired the end of April and the market is still a bit wobbly from that time until now.
The July sales drop came after a 35% drop in the Midwest. In the northeast sales were down 30%, in the south 23%, and in the west 25%.
The median sale price was up 0.7% from a year ago and down 0.2% from June at $182,600.
11 Comments to Home Sales lowest in 15 years
Comments
Thanks for teh quote in your post. If you ever have an questions about the Real Estate Market in Southern California, feel free to send me an email or call.
I just noticed my typo! I guess that means I’m human.
.-= Aaron Zapata´s last blog ..Don’t let your sellers read this They won’t like it by Aaron Zapata- Realtor =-.
Sales here in Las Vegas are still fairly brisk. The expiration of the First Time Home Buyer tax credit didn’t make a dent in our market. Summer time is our biggest sales period and this year sales are holding steady. Prices have stabilized in most areas of the city and prices are creeping back up in the entry level properties.
.-= C Richey´s last blog ..Prison Inmates Claim the Tax Credit =-.
Wow amazing! I can’t imagine a prise is getting lower but in Las Vegas Real Estate theirs a lot of big opportunity to have a house into a home. Keep posting for more!
.-= Las Vegas Real Estate´s last blog ..How The Foreclosure Process Works In Your State =-.
Ditto for the Dallas market. I don’t think the first time home buyer tax credit had much impact on us either, at least in the luxury market. Don’t get me wrong…sales are very slow at the moment but I am optimistic.
We actually just bought a house here in Texas. Builders are slow and they offered us some great incentives.
.-= Mike´s last blog ..Choose The Right Carpet Pad =-.
Home sales really did slow down. There are much less buyers looking to purchase a house right now than I’ve seen in a long time.
We have a great offer in houses here in North Las Vegas Real Estate. try to view and see how it cost less for you. Thanks for the post!
.-= North Las Vegas Real Estate´s last blog ..Las Vegas Real Estate Outlook For 2009 =-.
Is there any sign that this is going to turn around in the coming months?
wow….! Very nice article. You share a bundle of information in this article. You stuff is really very helpful and informative. Keep writing. Thanks a lot for sharing.
Home sales downfall is largely because of a lucrative tax credit program that targeted some first-time buyers and repeat buyers.
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