According to the National Association of Realtors (NAR), existing homes sales (defined as completed transactions that include single family homes, condos, townhomes and co-ops) dropped 27.2% to a seasonally adjusted annual rate of 3.83 million units in July. This figure comes in 25.5% below the 5.14 million-unit level in July 2009.
The NAR’s chief economist, Lawrence Yun, said a soft sales pace is likely to continue for a few additional months. Yun believes that consumers rationally jumped into the market before the market deadline before the home buyer tax credit expired. Since May (after the deadline), contract signings have been notably lower and a pause period for home sales may last through September. However, even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010.
To put that 5 million home sales figure in perspective, annual sales averages 4.9 million in the past 20 years and 4.4 million over the past 30 years.
What we have experienced this year are uneven and stimulated selling seasons. Each year, RE/MAX Main Line does 60% of the years business between January and June, with varying degress of sales pauses between July and August and in December. When looking at these historical trends, this data is not as scary or unusual as the headlines read.
During the next 90 days, I envision that sales will pick up and the recovery in the housing will continue, slowly.