Ray of light: July existing home sales hint at a price bottom

Posted Aug 21st 2009 5:30PM by Joseph Lazzaro
Filed under: Good news, Housing, Recession

U.S. existing home sales rose 7.2% in July to a seasonally-adjusted annual rate to 5.24 million units, the National Association of Realtors announced Friday. It was the fourth straight monthly rise.

However, the best news in the data was not so much the sales uptrend, as it was the apparent bottoming of the price downtrend: at minimum, the rate of decline is abating. Don't misunderstand: prices are still lower, on a year-over-year basis, but there are signs of stabilization.

By region, in July existing home sales surged 13.4% in the Northeast, where the median price fell 15% to $236,700 compared to a year ago; they rose 10.9% in the Midwest, where the median price fell 5.9% to $157,200; in the South, sales rose 7.1%, with the median price dropping 7.1% to $164,500; in the West, sales dipped 1.7%, with the median price plunging 28.0% to $202,300.

Another caveat: economists and federal government statisticians caution that the summer season -- calendar June, July, and August -- often distorts real estate data to the upside, due to the large number of families who choose to move during this period, when school is not in session. But if the uptrend in sales and the end of the 'lower-lows' in prices continues in the fall, that will likely confirm the U.S. housing sector's recovery.

Tags: existing home sales, featured, real estate, RealEstate, recession