Very interesting video and article by the Associated Press today along with commentary from the LA Times:
Some startling information from the AP this morning indicating that sales of previously owned homes are down over 27% in July. The credit for this has partially to do with the expiration of the federal tax credit for new home buyers.
This drop was worse than expected, and the Natinoal Association of Realtors (NAR) has said this is the worst drop since 1968, and home sales are at their lowest levels since 1995.
“From our vantage point, the first-time home-buyers credit pulled forward demand — by definition this is what stimulus measures achieve — however the issue this time is that there was so little demand to be pulled forward, the credit has left no demand for the summer,” Dan Greenhaus, chief economic strategist for Miller Tabak + Co., wrote in a research note Tuesday morning. “The result is exactly what we’re seeing: a near, if not outright, collapse in housing.”
Total housing inventory jumped 2.5% at the end of July to 3.98 million homes available for sale, representing a 12.5-month supply at the current pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9% below the 4.58 million in July 2008.
What does this mean? It means inventory is still very high, and home prices can be expected to stay suppressed for some time to come. Additionally; you can expect the short sale and foreclosure pace to continue for some time.
What are your thoughts? Post ‘em in the comments!
