Existing Home Sales to See Modest Improvement, Increase in 2009
Wednesday, July 09, 2008
by Michael Peron
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Existing home sales are expected to see “modest near-term movement,” with a spot of recovery in sales in the second half of the year, according to the National Association of Realtor's latest forecast.
NAR's Pending Home Sales Indicator (PHSI), which measures pending sales of existing homes, fell 4.7 percent to 84.7 in May from a revised reading 88.9 in April—and is also 14 percent below May 2007 when it stood at 98.5.
According to NAR's chief economist Lawrence Yun a slow down was expected, especially after sharp increase. “The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs, and the economy,” he said.
Based on current NAR indicators, existing home sales are expected to increase from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. Total existing home sales for 2008 are expected at 5.31 million, with a 5 percent increase to come in 2009 to 5.58 million.
“Location, location, location” is no longer just an advertisement for the solicitation of for-sale properties but an indicator of what's going on in the current market.
In the West, the PHSI decreased by 1.3 percent to 97.5 in May, though 2 percent higher that the previous year. The index in the Northeast also saw a dip of 2.9 percent to 77.0, a 16.4 slip from May 2007. The Midwest's PHSI stood at 78.6, a 6 percent decrease from the previous month and a 13.8 percent decrease from May 2007. The South also experienced a decline in its index by 7.1 percent, measuring at 84.5—a dramatic 22.1 percent drop from a year ago.
“Some markets have been doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood's exposure to subprime loans,” Yun said.
While properties are piling up, NAR President and broker with RE/MAX Real Estate Specialists in Long Beach, California, Richard F. Gaylord says it's definitely a buyer's market, offering immediate benefits and long-term value. “Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009,” he said. Jacqueline Gilbert
NAR's Pending Home Sales Indicator (PHSI), which measures pending sales of existing homes, fell 4.7 percent to 84.7 in May from a revised reading 88.9 in April—and is also 14 percent below May 2007 when it stood at 98.5.
According to NAR's chief economist Lawrence Yun a slow down was expected, especially after sharp increase. “The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs, and the economy,” he said.
Based on current NAR indicators, existing home sales are expected to increase from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. Total existing home sales for 2008 are expected at 5.31 million, with a 5 percent increase to come in 2009 to 5.58 million.
“Location, location, location” is no longer just an advertisement for the solicitation of for-sale properties but an indicator of what's going on in the current market.
In the West, the PHSI decreased by 1.3 percent to 97.5 in May, though 2 percent higher that the previous year. The index in the Northeast also saw a dip of 2.9 percent to 77.0, a 16.4 slip from May 2007. The Midwest's PHSI stood at 78.6, a 6 percent decrease from the previous month and a 13.8 percent decrease from May 2007. The South also experienced a decline in its index by 7.1 percent, measuring at 84.5—a dramatic 22.1 percent drop from a year ago.
“Some markets have been doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood's exposure to subprime loans,” Yun said.
While properties are piling up, NAR President and broker with RE/MAX Real Estate Specialists in Long Beach, California, Richard F. Gaylord says it's definitely a buyer's market, offering immediate benefits and long-term value. “Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009,” he said. Jacqueline Gilbert
