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Tuesday, July 17, 2012

Lawler: Early Read on Existing Home Sales in June

by Calculated Risk on 7/17/2012 06:29:00 PM

From economist Tom Lawler:

Based on an admittedly limited sample of realtor/MLS reports across the country, I estimate that existing home sale ran at a seasonally adjusted annual rate of 4.56 million in June, little changed from May’s SA pace and up 9.1% from last June’s SA pace. Unadjusted data clearly show a smaller YOY gain in June sales relative to May sales, which was expected, as this May had one more business day than last May, while this June had one fewer business day than last May.

It is worth noting that in several “distressed” markets, sales this June were down from a year ago, even though in many of these markets non-distressed (and especially non-foreclosure) sales, were up -- in some cases by a lot.

On the inventory front, various entities that track listings showed modestly different trends, though all show big YOY declines., e.g., reported that the AVERAGE number of listings in the month of June was up 0.5% from May, but down 19.4% from last June, while HousingTracker.Net reported that average listings (actually, the average number of listings on Mondays) in June in the 54 metro markets it tracks were down 1.3% from May and down 22.0% from last June. Looking at these data, combined with realtor reports, my “best guess” is that the NAR’s estimate for the number of existing homes for sale at the end of June will be about 2.5 million, up 0.4% from May but down 20.9% from last June.

On the median sales price front, it’s pretty clear that the national median existing SF sales price this June will show another YOY gain – the fourth in a row – though local realtor/MLS data suggest that June’s YOY increase will be a bit less than May’s. My best guess is that the NAR’s estimate of the median existing SF home sales price in June will be up about 6.4% from last June.
CR Note: This would put the months-of-supply at about 6.6 months, unchanged from May. For the month of June, this would be the lowest level of inventory since 2004, and the lowest months-of-supply since 2005. The NAR is scheduled to report June sales on Thursday.

Tom also sent me the following updated table on distressed sales. From Lawler: "Note that all of these shares are based on MLS data or realtor reports save for those for Southern California, which come from Dataquick and are based on property records."

CR Note: Notice the decline in distressed sales. Foreclosure are down in all these areas, and short sales are up in most.

Short Sales ShareForeclosure Sales ShareTotal "Distressed" Share
Las Vegas34.2%21.6%27.8%47.2%62.0%68.8%
Mid-Atlantic (MRIS)10.2%10.0%8.7%14.9%18.9%24.9%
Southern California17.7%17.9%24.5%32.9%42.2%50.8%
Northeast Florida36.3%43.2%
Hampton Roads28.8%29.7%

And from DataQuick on SoCal:
The number of homes sold in Southern California rose above a year earlier for the sixth month in a row in June, the result of robust investor demand and significant sales gains for mid- to high-end homes.

Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 24.5 percent of the Southland resale market last month, down from a revised 26.9 percent the month before and 32.9 percent a year earlier. Last month’s figure was the lowest since foreclosure resales were 24.3 percent of the resale market in December 2007. In the current cycle, the figure hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 17.7 percent of Southland resales last month. That was down slightly from an estimated 18.0 percent the month before and 17.9 percent a year earlier.