Now this article is misleading. They make the 6.8 month backlog look terrible. However, six months is a considered to be a market that is in-sync......in balance between buyers and sellers. A good thing! Its that neo fear factor in play.
Number of U.S. homes, condos for sale rises to 9-year high
By Rex Nutting
MarketWatch
WASHINGTON — The correction in the U.S. housing market continued in June, with inventories rising to a nine-year high while price appreciation slowed to the weakest pace in 11 years, the National Association of Realtors reported last week.
Sales of existing homes fell 1.3 percent in June to a seasonally adjusted annualized rate of 6.62 million, the private real-estate industry group said. The decline was close to expectations.
"The fervor has gone away," said Bob Walters, chief economist for Quicken Loans. "That's not a bad thing."
Even as sales softened, more houses came on the market. The inventory of unsold homes rose to 3.725 million, a 6.8-month supply at the June sales rate, the largest supply in relation to sales since July 1997. Inventories are up 39 percent in the past year. The inventory of condos has risen to a record eight-month supply.
The median price nationally has risen 0.9 percent in the past year to $231,000. It's the weakest price growth in 11 years. Price appreciation peaked at 16.8 percent last October.
The pullback in appreciation is "weighing on consumer spending via its impact on mortgage equity withdrawal and confidence," said Michael Gregory, an economist for BMO Nesbitt Burns.
Economists were expecting a decline to 6.58 million in June, according to a survey conducted by MarketWatch. Sales of existing homes in May were revised to 6.71 million from 6.67 million. Sales of existing homes are down 8.9 percent in the past year.
"I hope we are hitting bottom," said David Lereah, chief economist for the NAR, which is predicting sales of about 6.6 million this year.
Lereah urged the Federal Reserve to refrain from further rate increases, fearing that a weakening economy could pull the housing market down even more.
The Fed has said it believes the decline in housing has been orderly so far but has said that a sharp drop in housing that could depress consumer spending remains a major risk to its benign economic forecast.
Some economists expect the market to fall further.
"We expect this trend to continue and worsen as we move into the second half of 2006," said Phillip Neuhart, an economist for Wachovia.
Sales were flat in the West and Midwest in June. Sales fell 2.3 percent in the South, 3.5 percent in the Northeast.
Single-family sales fell 0.9 percent to 5.81 million. Condo sales fell 5.5 percent to 805,000. Median prices of single-family homes rose 1.1 percent in the past year, while condo prices are down 2.1 percent.
Sellers should expect lower prices, Lereah said, adding that he wouldn't be surprised to see single-family home prices fall nationally.
Some local markets, including the Seattle area, remain very strong. Once-hot markets — such as California, Florida and the Washington, D.C., area — are cooling. New Mexico, Texas, Pittsburgh and Milwaukee are heating up.
seattletimes.nwsource.com |
