Home buyers have waited for years but perhaps the agony is over. It is official; the National Association of Realtors® has confirmed that we are now in a buyers' market.
According to the NAR June report on existing home sales issued last week there
is now a 6.8 month supply of existing homes on the market.
One year ago the supply was 4.4 months. The joint report of the Department of
Commerce and the Department of Housing and Urban Development on new home sales
contained similar news; the supply of newly constructed homes on the market
will take 6.1 months to absorb at the current sales pace compared to 4.3 months
one year ago.
The NAR survey found that sales were down modestly in June and home
prices were still rising, albeit at a much slower pace than we have
become accustomed to in recent years. Seasonally adjusted existing home sold
at a rate of 6.62 million annual units in June, a 1.3 percent decrease from
the upwardly revised rate of 6.71 million in May. This was a drop of 8.9 percent
from the 7.27 million annual unit sales pace in June, 2005.
David Lereah, NAR's chief economist said that the market is "flattening-out." "Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing. At the same time, sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories."
The median existing-home price for all housing types - single family, town homes, and co-ops - was $231,000 in June, a 0.9 percent increase over June 2005's median price of $229,000.
NAR President Thomas M. Stevens stated that "people who were discouraged by the bidding wars that were so common over the last few years are finding more choices now. Relative to the five-year housing boom, this year is a buyer's market in much of the country with plentiful supply, along with interest rates which remain historically favorable, so it's a good time to buy a home."
Single family home sales were down 0.9 percent to an annual rate of 5.81 million from May to June. That was 8.2 percent lower than one year earlier and the median price, $231,000, was identical to that for all housing types.
Condos and co-ops experienced a sharper drop than single-family units. Sales of such units were off 5.5 percent since May to an annual rate of 805,000 units. This was a loss of 14.6 percent from the pace in June of last year. Median prices declined 2.1 percent year-over-year to $226,900.
The Northeast took the biggest hit in sales volume, dropping 3.5 percent since last month and 9.8 percent from June 2005. Yet this was the only region in which median prices were up from one year ago, a gain of 7.2 percent to $298,000.
New home sales, according to the Commerce/HUD report were 3 percent below the revised May rate of 1,166,000 to 1,131,000 units per year. This is 11.1 percent fewer units sold than a year ago. The year-over-year sales losses were not, however, distributed evenly. Sales this June compared to June, 2005 were off 33.7 percent in the Northeast and 24.5 percent in the Midwest. The pace slowed only 5.2 percent in the South and 7.0 percent in the West. The median sales price of new houses nationally was $231,300.