Asheville Mountain Real Estate Blog

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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.

Tuesday, July 28, 2009

Existing Home Sales: June, 2009

Released late last week, let's examine how the market fared with respect to sales of existing homes. In few words, less bad than it was.

Existing home sales increased 3.6 % in June, 2009 vs the prior month, as well they should if anything resembling a normal seasonal pattern is in place. This segment of the market however remains 0.2% less than one year ago, which was nothing to brag about.

33% of existing home sales are distressed in nature, either foreclosures, or short sales. Thus, the amount of "normal" sales activity remains disguised and depressed. We continue to see this as a notable blemish, often overlooked.

Months of supply dropped slightly to 9.4. 6 months of supply is a place we would like to be, so the overhang in inventory is still with us. Prices declined by 15.4% from a year ago.

Our perspective is probably most represented by an article that appeared in Market Watch:
"The acid test is whether sales can push on beyond the pre-Lehman trend of just under five million over the next few months," said Ian Shepherdson, chief U.S. economist at High Frequency Economics".
For context, Lehman fell sometime in mid September, 2008. One could say it was when things went from bad to worse. At least that was what it felt like at the time. It would be good to get back to such levels, without such a large percentage of distressed sales.

A final hurdle to get back will be the ability of the market to shoulder the expected increases in inventory once things do improve. Sources of this new inventory will range from individual sellers waiting for better times, to the restart of idle subdivisions, to bank owned properties not yet listed for sale, among others.

We stand in the camp that expects this to be a significant test.

Thanks for stopping by,
Black Bear Realty Website
828 689 2055
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Filed Under: Real Estate Analysis, News, & Data

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