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Wednesday, October 29, 2008

Real Estate Statistics: September, 2008

Every month, we round 'em up here, the pertinent supply and demand picture.

The Quick Summary
Glimmers of hope as inventories, the dominant issue of the past 2 years showed signs of decreasing. Sales for existing homes actually rose slightly, but this seems to be on the basis of foreclosures. Reaching statistical normalcy is still some months away.

Supply Numbers
Permits, Starts and Completions, (PDF): Declined 37.4%, 31.1%, and 20.4% from Sept, 2007.

The Big Picture correctly chracaterized this as good news, to the extent that inventories need to fall, but bad news for the economy. Single family permits, the most leading of indicators were down 38.9% nationally, and 39.8% in the South from one year ago.

New Home Inventories, (PDF): In terms of raw numbers, are down 33% from one year ago, and in terms of months of supply, fell to 10.4 months. This is a glimmer of good news, but is still a long way from the 6 months of supply that is considered normal.

Existing Home Inventories: In another ray of sunshine, this segment representing 85% of all sales showed a decline to a 9.9 month supply. Again, something like a 6 months supply would be nice to see, so the bottom is a ways off just yet.

Demand Indexes
New Home Sales, (PDF): 33.1% less than one year ago, and 66.6% less than the peak in 2005, with median prices down 9.1%. This combination of lower new housing starts, and lower prices will need to persist for some number of months in order to fully rectify the problem of excessive inventories. Putting aside other economic concerns, this is the path to normalcy.

Existing Home Sales: Displaying something we have not seen in around 2 years, existing home sales rose 1.4% from one year ago. As Business Week points out however, the sub-story is that foreclosures comprise 35%-40% of transactions on a national level. In the South, existing home sales fell by 7.8% from one year ago.

Forecasts?
The approach to the bottom will not be difficult to see, since we remain a good distance from historical balance in terms of the numbers. A couple of the September indexes moved in favorable directions for the first time in recent memory, but this is clouded by foreclosures and the wider events since the fall of Lehman Brothers in mid September. Caution and deliberation would seem to be friends here.

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2 Comments:

Anonymous New Jersey Real Estate said...

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3:19 AM  
Blogger Black Bear said...

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10:07 AM  

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