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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Wednesday, August 27, 2008

Housing Statistics: July 2008

Our monthly roundup of supply and demand, as briefly as possible.

The Quick Summary
Demand continues at such low levels that inventories remain near record highs. Prices need to decline further.

Supply Indexes: Inventories Won't Drop
Permits, Starts and Completions, (PDF): Declined from one year ago by 32.4%, 29.6%, and 31.7% respectively. These are deep numbers, and in terms of permits for single family homes:
...the most leading of indicators, again suggests extensive weakness in future construction activity dropping 41.42% nationally as compared to July 2007 and an astonishing 63.95% since the peak in January 2005.
New Home Inventories, (PDF): For a while now, the data here has shown the raw number of homes for sale declining. However, with demand dropping at greater rates, when inventories are expressed as "months' supply", there is little or no improvement. Current supply stands at 10.1 months.

Existing Home Inventories: (Chart Source): Existing homes are 85% of the market and, an check in at, 11.2 months' supply, inching upward to the all time record in 1982.

Demand Indexes: 40% to 60% Decline From Peak
New Home Sales, (PDF): 35.3% less than last July. Many news outlets reported an increase in sales based upon downward revisions of the previous month. Money CNN does a good job at sorting it all out. Basically, it was the worst July since 1994.

The sales rate of 515,000 units needs to be compared with the levels for 2005 and 2006 which finished at 1.283 million and, 1.051 million respectively, a decline of around 60% from the peak.

Existing Home Sales
: 13.2% less than last year. The median existing-home price was $212,400, down 7.1 percent from a year ago when the median was $228,600.

The pace of 5 million units compares as follows; for 2004, 6.778 million, for 2005, 7.076 million, and for 2006, 6.478 million. That's around 41% less than the peak.

The Forward Look
From The Wall Street Journal: Inventories remain too high for current prices to reduce them to normalcy any time soon.

Foreclosures are running at such high levels, inventories will likely increase.

29% of Americans who purchased a home within the last 5 years are now in negative equity signaling more potential inventory.

And from Matrix, the final word:
Mortgages are more expensive and less accessible than two years ago. Until that changes, I wouldn’t expect real, measured improvement.
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Anonymous Myrtle beach rentals said...

Hopefully the bottom of the market is nearby and everything will start moving again after the election is over

3:17 AM  

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