Existing home sales rose in Q2 over Q1, but this is on major price cuts according to the latest report from the National Association of Realtors. This says that one-quarter of cities (35 out of 150 cities) showed some improvements in price, but there were drops in 115 cities with the largest drops coming from select areas in California, Arizona, Las Vegas, and Florida.
The major sales gains seen in certain states coincided with major pricedrops. In fact, the report even shows that fire-sales are driving thenumbers. High foreclosure areas are seeing homes selling BELOWREPLACEMENT COST values.
Total state existing-home sales, including single-family and condo,were at a seasonally adjusted annual rate of 4.91 million units in thesecond quarter, DOWN 0.8% from 4.95 million units in the firstquarter, and were 16.3% BELOW a 5.87 million-unit pace in thesecond quarter of 2007.
The national media price is being driven down by foreclosures and shortsales accounting for one-third of the transactions. Q2’s median pricewas $206,500, down 7.6% from Q2-2007 levels of $223,500.00.
The good news is that they noted Freddie Mac showing that averagecommitment rates on 30-year mortgages was 6.09%, compared to 5.88% inQ1 and compared to 6.37% in Q2-2007. The bad news is that requirementsfor all loans are far higher than before and many buyers are now goingto essentially be renters for the rest of their lives.
This is the sort of news that makes you want to go celebrate your kid’s birthday party and letting the kid pick any gift of their choosing inside the store…. at the dollar store.
It seems like the days of thousands and thousands of part-time hobby realtors are probably gone for good.
Jon C. Ogg
August 14, 2008
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