As you may recall from last month’s installment of "How the NAR Spins", [I mean turns] Yun was gleefully celebrating a 2.9% month-to-month increase while ignoring the year-over-year 24% drop in home sales. Yun said last month:
We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing. Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.
Fast forward to today’s NAR release. Month-to-month, sales are down 2%, and the YOY is down 20%. Additionally, rather than "drawing down", inventory rose 1% MOM, and 6.6% YOY.
The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.
You would think that the NAR would have felt that higher sales in high cost areas were skewing prices on the way up, but Lereah had a different view back then. In August 2005 the NAR reported:
Lereah noted that the strongest rates of price growth tend to move geographically. "In examining the hottest markets for home price appreciation, we see a rolling boom moving from one metro area to another over time, as well as a spillover effect into nearby areas with lower home prices," he said. "This is spreading the wealth of housing returns, with a natural easing of appreciation in areas following a period of extraordinary price growth. Even after slowing in a given area, prices typically have continued to rise faster than historic norms." Over the last four-and-a-half years of record home sales, no area that has experienced a sustained period of double-digit price growth has later seen a price decline.
Yun, as usual likes to show that there are still markets out there doing well. He states:
A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C.
Certainly not as bad as some markets, but if these markets are as good as it gets, then things aren’t looking so good.