National Association of Realtors: Exisiting Home Sales and Western Speculation

The National Association of Realtors reports that home sales were down for the month of April but
incomes during the recession may be starting to stabilize and we may see demand pick up down the line.  Homes are still available at near fire-sale prices and are extremely attractive- especially with low 20 and 30 year mortgage rates.

Here is the press release.  The importance of this release is that it confirms the home sales were down.  Looking at the sortable chart we see existing home sales were down 2.2% since last month (although up 19.2% from this time last year).  Take note of the "Inventory*" and "Mos. Supply" columns-  an average of 8.3 months to clear all inventory is still about 2 months longer than conditions found in a balanced market.  Also inventories are up 1.1% from last year which indicates that conditions are really not improving much. 

On a positive note if you look at the table below titled "Sales Price of Existing Homes" you will see that sales prices for existing homes are up 2.7% from last year. Now go to the following table on Existing Single Family Home Sales.  Here we see a 1.6% drop in home sales since last month which suggest that the single-family home market may be cooling down.  It is important to see that this part of the housing market has been improving faster than the rest of the residential market as it may be a precursor of good things to come.  Compare 7.8 months to clear inventory to 8.3 months to clear inventory for the market as a whole.  It is interesting to note here the sales price of existing single family homes.  Compare the West to the rest of the country:

Can one say that the California housing market is one speculative bubble? The West experienced a 9.5% not seasonally adjusted and 7.4 seasonally adjusted increase in home sales prices (since last year) as compared to more modest increases (0.1% from the Northeast, Midwest 1.6% and South 2.6%) from the rest of the country.  I wonder where the next real estate bubble will start...