by Calculated Risk on 9/24/2009 10:00:00 AM
Thursday, September 24, 2009
Existing Home Sales Decline in August
The NAR reports: Existing-Home Sales Ease Following Four Monthly Gains
Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.7 percent to a seasonally adjusted annual rate1 of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2 percent.
...
Total housing inventory at the end of August fell 10.8 percent to 3.62 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, down from a 9.3-month supply in July. Unsold inventory totals are 16.4 percent lower than a year ago
![Existing Home Sales](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgabz1gC6x-FLBQofRsOTYQrM97s6LIloyEQ1PKtevHJ69WeU7RzCmuCKexFJxlxvnQLFSX7ecULNIOn4bxKs5bMvEGosFI6FQLcyrXKIgFedHNRc5EHmBq28zF9oqqAezn2krj/s320/EHSSalesAug.jpg)
The first graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.
Sales in Aug 2009 (5.1 million SAAR) were 2.7% lower than last month, and were 3.4% higher than August 2008 (4.93 million SAAR).
Here is another way to look at existing homes sales: Monthly, Not Seasonally Adjusted (NSA):
![Existing Home Sales NSA](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtWCn7SPLMjzDMLIzTDKJXIS_JU1TTJsIGXqBilu0S5nQ_6-CSuPMtA9KnI225IHUL8A9TMof88ZkPbYruy-XyTa0Z6ciPjOdRwGyfVkmsnZjBbqxMf9dLR994MT_qhXVn8GH3/s320/EHSSalesNSAAug.jpg)
It's important to note that many of these transactions are either investors or first-time homebuyers. Also many of the sales are distressed sales (short sales or REOs).
An NAR practitioner survey shows first-time buyers purchased 30 percent of homes in August, and that distressed homes accounted for 31 percent of transactions; both were unchanged from July.
![Existing Home Inventory](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiG7ft4vag_WAPrZFaRw7vhmTgGpe82NW1xju1Lh1X3LtflCV68u0QTLyhUIzLqhzWZ3a_5cweXix_R37meXpJA6MQLF3pMaotWwkSU27oLWKNxnN7EEVKXt-moAZ2YCw69xNxm/s320/EHSInventoryAug.jpg)
Typically inventory peaks in July or August.
Note: many REOs (bank owned properties) are included in the inventory because they are listed - but not all. Recently there have been stories about a substantial number of unlisted REOs and other shadow inventory - so this inventory number is probably low.
![Existing Home Sales Months of Supply](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNyn6O1q9kPMedQOnW6pfU0xRQdeCSxSOSE0jufj-MX5Eagwzuz8eWs1s_8F8x2T_FNFLU4l-te14wYo31jDMak9a3OPR5dH4l6fpPNCqmvMNs0Mm4tMT5G4FqavEQGVP6V1qh/s320/EHSmonthlyAug.jpg)
Months of supply was steady at 8.5 months.
Sales decreased, but inventory decreased more, so "months of supply" declined. A normal market has under 6 months of supply, so this is still very high.
Note: New Home sales will be released tomorrow.