Home Sales Fall Again in August
By Mark J. Donovan
Well after some improving home sales data in July it appears the home sales market is still in uncertain waters. The latest home sales report that came out from the National Association of Home Realtors earlier this month indicated that home sales fell in August by 2.7% from the previous month. In addition, the report indicated that the median sales price on existing homes fell to $177.7K, down 12.5% from August, 2008.
The home sales decline was pretty much universal throughout the country with the exception in the west where home sales increased by 2.7%. And though the total inventory of homes on the market fell a little to 10.8%, based on the current sales pace there is still an 8.5 month supply of homes on the market.
All of this news is discouraging, but quite frankly not surprising. With unemployment at 9.8%, and 17% if you count the folks that are no longer eligible to collect unemployment benefits, or have found only part time work, or have quit looking altogether it is no wonder why home sales and median home sale prices continue to drop.
Though I am optimistic in the long term, I believe the next 1-2 years will continue to show sluggish home sales. For one, it will take that long for the unemployment picture to significantly improve, assuming that we are indeed at the cusp of crawling out of the biggest recession since the great depression of the 1930’s. I also believe, that the American public will demand another “political change” in 2010 that will result in a balanced government agenda that will ultimately improve the emotions and spending habits of the consumer. Consumer spending and small business success are the two engines that will eventually turn the economy and the housing market around. When these engines begin to fire on all cylinders the housing market should begin to enter its next bull market.
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