June Existing Housing Sales
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June existing home sales dropped almost 1 percent sequentially from May 2011, and were off 8.8 percent from June 2010 (not a surprise since June 2010 was the last month featuring the $8,000 homebuyer tax credit. Also expect an increase year-over-year in July due to the June 2010 cannibalization effect of housing sales from the $8,000 tax incentive).
To remove the noise, the following graph shows the same data but this time as a 12-month moving average. This view really accentuates the trend of the data—which is definitely continuing a downward trajectory. I am still sticking with my forecast, however, of 4.9 million existing home sales this year. It is very evident that the $8,000 homebuyer tax credit did not recover the housing market but was more of an 18-month respite.
Prices are still weak but may have finally hit the bottom. The first graph below shows the monthly median price while the second is the 12-month moving average of the median price. The current median price in June was $184,300. The latest 12-month moving average is 24 percent less than the peak seen in July 2006. And yes—there does appear to be a slight up-tick in the latest 12-month moving average median price. Stay tuned……..