The September existing home sales figures recently hit the tape. Here’s what the numbers looked like:
* Existing home sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units from 5.09 million in August. That was twice the gain that was expected and the rate of sales was the highest since July 2007.
* Single-family sales gained 9.4%, while condo and cooperative sales rose 9.7%. By region, sales climbed across the board. They were up 4.4% in the Northeast, 9% in the South, 9.6% in the Midwest, and 13% in the West.
* The raw number of homes for sale dropped 7.5% to 3.63 million units from 3.924 million in August. Supply was off 15% from a year earlier. The months supply at current sales pace indicator of inventory dropped to 7.8 from 9.3. Single family inventory dropped to 7.6 from 9, while condo inventory fell to 11 from 12.1.
* The median price of an existing home fell 1.4% to $174,900 from $177,300 in August. That was off 8.5% from $191,400 in the year-ago period.
September was a blockbuster month for existing home sales. The looming expiration of the tax credit, combined with stabilization in the broader economy and cheap home prices, drove sales to the highest level we’ve seen in a couple of years. The supply of used homes for sale is also steadily declining, an encouraging trend considering that new home inventory has already dropped like a rock.
If there’s a fly in the ointment, it’s concern about the “pull forward” effect. Clearly, some buyers purchased a home this summer because of the tax credit and the tax credit alone. Unless that credit is extended or expanded, we’ll see “give back” in the coming couple of months. I don’t think it derails the overall recovery. That’s being driven by true, fundamental forces, such as the dramatic improvement in housing affordability. But it will be noticeable nonetheless.
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{ 4 comments… read them below or add one }
Mike,
You got the numbers right, but here’s another interpretation:
http://www.ritholtz.com/blog/2009/10/existing-home-sales-fall-in-september-09/
Mike Larson Reply:
October 23rd, 2009 at 12:15 PM
As one of the biggest housing bears on the planet until about six months ago, when I publicly declared that all the housing indicators were suggesting a stabilization, I don’t understand the argument for using non-seasonally adjusted numbers in housing. There is a clear seasonal pattern to sales, year-in and year-out, bull market or bear. People buy more houses in the spring/early summer because they want the kids in their new school by the start of the year and because the weather’s better. So you always want to use the SA numbers when looking at MONTH OVER MONTH changes. The only time you’d use NSA figures is if you want to compare YEAR OVER YEAR activity. And on that basis, the YOY change in single family sales has been positive for four months in a row.
I like Barry’s work, generally speaking. But I don’t think this makes much sense (using NSA numbers to compare MOM changes because sales ALWAYS slow as you get out of the peak buying season). As a matter of fact, I just eyeballed the single-family sales data (NSA) going back every year since 1990. Sales fell EVERY SINGLE SEPTEMBER in those 19 years.
What improvement in the broader economy? Are you kidding me? I’m not seeing it. This is pure spin. I don’t believe there are that many first-time homebuyers with the cash and good jobs to be out there buying houses, tax credit or no tax credit. Also, foreclosures continue to rise, so I’m not believing inventory is shrinking as much as stated. This does not pass the smell test.
All the “good times are here again in the housing market”. And not one word about the ARM’s and ALT-A that are going to start in Jan. 2010 thru 2012. Which are as big if not bigger than the Sub-Prime. HUH !!!!