Existing Home Sales

Existing home sales are in..

The spin doctors are busy spinning, but the numbers really are bittersweet, Existing Home Sales did not drop as expected but stayed on par with last months adjusted numbers. Sales are still very strong. Keep in mind that the EHS numbers are lagging indicators, they reflect market activity of approximately 2 months ago.

Existing Home Sales

However, most interestingly, and this is the data point you will not see in the cheerleader pieces is that the median home price dropped this month.

Yes, home prices have dropped slightly (although I hate median numbers, so take it with a grain of salt).

August 254,000
September 245,000 (~3% drop)

August 220,000
September 212,000 (~3% drop)

So, there you have my spin on the issue. True, we’ve clocked in at the same rapid pace we saw last month, however, we are also noting a 3% drop in home prices over that period. So is the knife falling? I’ll let you make that decision.

Caveat Emptor,

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31 Responses to Existing Home Sales

  1. grim says:

    Median Home Price, August Versus September. Declines noted in ~%.

    Aug 220,000
    Sep 212,000 (~3%)

    Aug 254,000
    Sep 245,000 (~3%)

    Aug 176,000
    Sep 175,000 (~0.5%)

    Aug 189,000
    Sep 184,000 (~2%)

    Aug 327,000
    Sep 302,000 (~7%)

    Oh yea, Consumer Confidence tanked below estimates again. I almost feel sorry for the retailers this Christmas. At least we can look forward to good post x-mas sales this year.

    Spin spin!

  2. Anonymous says:

    This is definitely a strong report. I think we may have to wait for another month or 2 to see weakness. I was expecting greater inventory, a greater downward revision.

    In NJ proper, we know that there is a large pile-up of inventory in some towns. Some towns are still selling well though.

  3. grim: Any way I can find out what NJ’s numbers were for the time period? I would suggest the drop was more, based on what I am seing in my own neck of the woods.

    Oh by the way a realtor sent a letter to the editor at the Bergen RTecord, claiming her assocaition has received hundreds of calls from concerned customers, both buyer and sellers, in response to the peice called rmember the last time the bubble burst.

    She calims their customers are too busy to read anything more than headlines, and the head line was a scare tactic, evn though the article istself was balanced.

    She than goes on to pontificate about how BErgen county becasue of its proximity to NYC, rapidly disappearing land, and increase in immigration is immune to a bursting bubble.

  4. grim says:

    Not so strong, only spun that way.

    Take good note of the inventory numbers as well. There is an increase of inventory of 19.6% over last year. And the months supply looks to be trending higher.

    Even more interesting is the median drop, looks like median prices dropped back down to May levels

  5. Anonymous says:

    Also, if the sales rate falls off even a little bit, the actual number of months required to sell will jump.

    I saw the letter by the realtor in the Record as well. It was not so subtle way to apply pressure to the Record.

    That realtor’s misleading information does need to be addressed. I was tempted to write a letter in response to it, but papers rarely publish rejoinders to letters.

  6. Anonymous says:

    She than goes on to pontificate about how BErgen county becasue of its proximity to NYC, rapidly disappearing land, and increase in immigration

    She also mentioned job growth, which is pretty weak actually. One should ask her whether Bergen county has gotten nearer to NYC since 2002 (prices up 50-80%), and if the fact that many areas like Edgewater are building high rise condos and townhomes on old factory sites means that they’ve learned to use space available for building higher density.

  7. grim says:

    To get the NJ data we need to wait for the 3rd Quarter NJAR statistics.


    I’ve been trying to wait patiently for that data to be published to the website. I believe that data has been released to Realtors already, as I’ve seen quotes in the media that quote median changes more recently than Q3.

    Unfortunately, this data doesn’t show month to month changes, and median by county is only compared as YOY not monthly changes (spin again), so you need to keep all the reports for comparison.


  8. Our new upcoming Fed Chairman Helicopter Ben does not think there is a threat of inflation.

    If he do not raise the interest rate, the Bubble might linger longer than expected — rather than being punctured right away.

    Look at the Gold price today. They are way up.

  9. RentinginNJ says:

    This post has been removed by the author.

  10. RentinginNJ says:

    Check out the numbers for condos/coops only. I tend to think that condos are the proverbial “canary in the mine” for RE.

    YOY US inventory increase 36.6%

    Average price Aug $282,900
    Average price Sep $256,800
    9.23% Drop

    Median price Aug $262,300
    Median price Sep $236,900
    9.23% Drop


  11. grim says:

    Thanks for posting the condo data up, you are right, condos are typically the first to show weakness.


  12. grim says:

    I agree, the market as a whole is taking Bernanke as a sign of inflation to come.

    10Y yield is up to 4.48, near it’s resistance at 4.5. Perhaps we’ll see it break through with these additional fears. I believe Gold is up for the same reason.


  13. Richard says:

    you can’t read into today’s numbers as they’re lagging indicators. nationally new homes sales are closer to the present. i think i speak for everyone in NJ that inventories are definitely rising and houses are sitting longer. sellers are still demanding historical top $ for thier homes and most aren’t biting. what i believe you’re going to see is people leaving their houses out there hoping for that ‘1’ buyer to come along and give them the listing price. if they don’t get it, they might pull it and list in the spring. the springtime is going to see inventory like you can’t believe with sellers thinking the peak season will have more buyers and will more likely pay their asking price. i have no idea what the ratio of sellers and buyers will be, but i can tell you the inventory hitting the street will be the largest in a number of years.

  14. grim says:

    There is quite on the calendar in the upcoming week, including the new home sales numbers..

    10/27 New Home Sales
    10/28 GDP #s
    10/31 Consumer Spending/Saving
    11/1 FOMC Policy Annoucement (~25-50 basis point rate hike)


  15. Steve D says:

    Dear Grim et al,

    Just a comment to thank you for the very insightful and fact-based analysis and commentary on the developing RE Bubble. I’ve been reading your blog for a couple of weeks, and it’s far more on target than most major financial pubs. Clearly local media are just not credible on this issue.

    Also agree with the collective analysis represented in comments as it relates to the Fed, Helicopter Ben, Gold, growing pressures re: Spring market situation, etc.

    Did someone already mention the article by Thomas Donlon in Barron’s last issue? Very useful chart re: U.S. dollar’s decline in purchasing power over the last 80 years. In effect a reminder that housing, at least one’s principal residence, is at best a hedge against inflation over the long run. When housing has outpaced for so long, regression is inevitable.

    I look forward to continued great reading and education on this blog. Thanks again!!

  16. grim says:


    I’ve been trying to get my hands on the article, any way you can post a link to it?


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