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New Home Sales and Sales of Existing Homes Up in June July 27, 2009

Posted by John Watch in Uncategorized.
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WASHINGTON (AP) — New U.S. home sales rose by the largest amount in more than eight years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.

Great news or just a seasonal factor coming to play?  Public recors show that residential sales activity is returning to the levels of the seasonal sales market.  No one should be surprised that new homes sales have increased with the incentives of the $8,000 new home buyer program and interest rates below 5.5%.

But hold on, seasonal sales activity should be up.  The peak months for sales will be June, July and August.  So for the next several months we should continue to see a recovery in activity.  The key benchmark for recovery is the median sales price in the property data, which is still down.  Once the excess building supply and foreclosure activity (Housing In Crisis , Mortgage Assistance Program) abates, this number should correct itself to higher levels of $220,000 to $225,000.  This will not occur until the summer selling season of 2010.

So yes, great news, but the real recovery is still a year off.

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Comments»

1. Cyclical, Seasonal, or Emotional: Where is the Real Estate Market Today? « AccuriZ - July 31, 2009

[…] Changes occur every year and follow a fairly consistent pattern.  The news today and for the next several months is a result of seasonal changes, not necessarily structural ones.  […]


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