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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, July 08, 2009

Real Estate Statistics: May, 2009

The May, 2009 numbers were reported over the last portion of June. We covered them individually at the time, but round them up here in one place each month. A little late this time around, but nevertheless.

The Quick Summary
New homes remain a very troubled sector. Existing homes, if not exactly showing signs of recovery, are at least less bad. A whole slew of forward looking indicators continue to languish. Most numbers hover around record levels, though less new records were set this month.

Supply and Demand Data
New Homes
Permits, Starts, and Completions: The index is comprised of several sectors, the most important indicator being single family units which declined by 35.1%, 40.9%, and 43.4% respectively. The amount of single family activity here hovers near record lows dating back to 1968.

Inventory and Sales: Perhaps the big story is that despite such drastic declines in permits, etc, for more than two years now, that inventory on a months of supply basis has declined only 4.7% in the last year.

New home sales now represent the lowest number since record keeping began in 1963, and have declined 75% from their peak in 2005. A major factor in this trend has been the low prices and large percentage of distressed/foreclosed properties in the existing homes data.

Existing Homes
Inventory and Sales: Inventory declined. The raw number of homes vs. one year ago is no longer setting records, though still high. Months of supply dropped to 9.6, still more than we would like to see.

Sales were 3.6% less than one year ago, while prices dropped 16.8% over the same time period. In the South, sales of existing homes fell 9.9%. Distressed sales which had routinely been 45% of the total dropped to 33%.

In the existing home sales sector at least, this is a collection of numbers that are less bad. There is still a distance to go to find equilibrium. We stand in the camp however that waits for new sources of inventory to enter the market as signs of life show themselves.

Looking Ahead
New inventory would come from would be sellers who have held off for better times, as well as distressed properties not yet listed by banks. This will slow any recovery. In particular we look ahead to new and rising rates of foreclosure that will make inventory reduction more difficult.

The idea of a new wave of foreclosures has been out there for some time now. This link is a particularly good recap and graphic that illustrates the notion.

The PHSI, (Pending Home sales Index), is not persuasive in terms of calling a bottom, and has lost its capacity as a forward looking indicator with the market distorted as it is. The MBA, (Mortgage Bankers Association), Application Survey does not show any indications of support. Time to sit back and watch.

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Filed Under: Real Estate Statistics and Data

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