Thursday, September 24, 2009

Home Inventory Measure Falls to April 2007 Level

The best news in today's housing report from the National Association of Realtors on existing-home sales (data here) was that at the current sales rate (425,000 homes sold in August), it would take 8.5 months to sell off the current inventory of 3,622,000 homes, and this inventory measure is at the lowest level since April of 2007 (see chart above). A year ago August, the months supply of homes was 10.6, and had averaged more than 11 months in the four previous months, so there has been a significant improvement over the last year in the balance of homes available for sale relative to the demand.


At 9/24/2009 1:33 PM, Blogger Unknown said...

Huge Shadow Inventory not included in NAR's analysis

"The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market...Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales"
“The favorable seasonals will disappear over the coming months, and the reality of a multi-million-unit housing overhang is likely to set in"
"Without the huge overhang of shadow inventory, this general trend of declining year-over-year inventory levels would be considered a strong positive for the housing market. However - right now - these declines (in inventory) are probably misleading."

Calculated Risk - Shadow Home Inventory

And really - anything from the NAR should be viewed skeptically - it is a pro-sales industry trade group which has every reason to reflect 'green shoots' and does so. NAR's data might be useful, but its analysis is less so, and the accompanying press releases are pure spin.

At 9/24/2009 2:46 PM, Anonymous Kevin said...

Your novice is showing...every down real estate cycle has similar characteristics. There are ALWAYS folks who can wait to sell - same is ALSO true for some buyers. I see your blog is giving investment perspectives yet you obviously have no expertise. Such is the state of the online world - millions of instant experts. The rest of the world should follow your advice at their peril.

At 9/24/2009 3:04 PM, Anonymous Anonymous said...

About 1.2 million loans out there are in limbo: The borrower is in serious default yet the bank has not started the foreclosure process. Another 1.5 million are in early stages of the foreclosure process but the bank hasn't yet taken possession of the home. Counting these and loans that are highly likely to end up in default, one analyst estimates three million to four million foreclosed homes will come on the market over the next few years.

Snipped from Reason: Corpse of a Thousand Houses

At 9/24/2009 4:56 PM, Anonymous Chester said...

Too bad home sales fell in August.

At 9/24/2009 7:02 PM, Anonymous Waybent said...

According to the NAR, existing home sales fell 140,000 units (SAAR) from July to August, a 2.7% decline.

August 2009 home sales were only 3.45% higher than last year, despite a 6% drop in the national house price index (seasonally adjusted) during that same time period.

Foreclosures started were 1.36% of all mortgages in 2Q a slight pause of only 1 basis point from 1Q09, still a virtual record high. Foreclosure inventories rose to 4.3% in 2Q09, pushing the record up for the eighth consecutive quarter. Nearly 8% of mortgages are SERIOUSLY delinquent, giving a good indication of where foreclosure rates are headed in the coming months.

All this, and Option ARMS and Alt As will begin re-amortizing (NOT resetting lower) in the coming months.

With cooling temperatures comes a cooling housing market. This will be the winter of CD's discontent.


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