Lawler: Early Read on Existing Home Sales in July

From housing economist Tom Lawler:

Based on publicly-available state and local realtor/MLS reports from across the country released through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.41 million in July, down 2.9% from June’s preliminary pace and down 1.3% from last July’s seasonally-adjusted pace. Unadjusted sales last month should register a significantly steeper YOY decline than seasonally adjusted sales, as there were two fewer business days this July than last July.

Local realtor/MLS data also suggest that existing home listings in aggregate increased modestly last month, and I project that the inventory of existing homes for sale as estimated by the NAR for the end of July will be 2.14 million, up 0.9% from June’s preliminary estimate and down 5.3% from last July. Finally, I project that the NAR’s estimate of the median existing single-family home sales price for July will be up 5.3% from last July’s estimate.

Compared to last July unadjusted home sales last month were down in a wide range of markets across the country, but that is less surprising when one takes into account the significantly lower business day count (two!) this July relative to last July. There were, however, a few notable markets where unadjusted sales last month were sharply lower than a year earlier.

Last month residential home sales in the Portland, Oregon metro area were down 19.6% YOY. While residential listings in July were still slightly down from a year earlier, the increase in listings since February has substantially exceeded the typical seasonal norm.

In the Denver, Colorado metro area residential home sales last month were down 17.6% YOY. And while residential listings remained historically low, listings how increased considerably faster than the seasonal norm since February.

Finally, existing single-family home sales nine-county San Francisco, California Bay area last month were down 16.1% YOY. The California Association of Realtor’s “Unsold Inventory Index” for the SF Bay Area was 2.8 months in July, up from 1.8 months last July.

All three of these markets have seen substantial home prices increases over the past years, as well as historically very low inventory levels. All three markets have also, however, seen YOY declines in sales for at least four straight months.

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