NAR: Existing home sales rose 3.1% in July

From the National Association of Realtors this morning: "Existing-home sales rose in July to the highest level in five months, although sales have hovered in a relatively narrow range over the past 11 months, according to the National Association of Realtors."

More: "Existing-home sales –- including single-family, townhomes, condominiums and co-ops -– increased 3.1 percent to a seasonally adjusted annual rate of 5.00 million units in July from a downwardly revised level of 4.85 million in June, but are 13.2 percent lower than the 5.76 million-unit pace in July 2007."

From NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach: “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”

Also: Inventory rose slightly in July, according to NAR, while prices fell. Prices: "The national median existing-home price for all housing types was $212,400 in July, down 7.1 percent from a year ago when the median was $228,600."

Inventory: "Total housing inventory at the end of July rose 3.9 percent to 4.67 million existing homes available for sale, which represents an 11.2.-month supply at the current sales pace, up from a 11.1-month supply in June. The rise in supply results from a sharp increase in condo inventory; the single family supply declined."

-- Peter Viles
Your thoughts? Comments? E-mail story tips to Peter Viles.
Photo credit: Associated Press
 

Comments

[mike]

i've never been able to transact a home without an inspection. are there states which don't require that??? he is of course talking about the inspection in which you pay 300-1500 dollare for a guy to tell you that you should have a plumber, roofer, electrician, concrete mason, framer and soil inspector to come in and give you a real report on these items...

[zach]

They are cooking the books

the market has another 90% to fall

[Laker]

From what i see, 8 out of 10 houses now listed as REO are major fixers. The nice places are simply not listed or pulled out as they cannot sell.
You see, once a dump (fixer) is sold for $400,000 in a place that have nice houses listed for $800,000. Then all that is needed is another dump to follow. As soon as you have two comps, appraisers can't ignore it. They don't care or can even tell if those sold comps were dumps...So those sellers even with nice houses asking $800,000 can't sell unless they lower their price at least $200,000-300,000. That is why they remove the places from the market, that is why the inventory is full with fixers, shacks, and dumps. And mostly important, that is why, there will be a wave of nice houses to flood the market as many of those holding break and either slash prices if they can, or simply go to foreclosure.

[Craig]

I wouldn't be surpeised if some of theses are not owner occupied but simply bought by an investment pool. Check out the link

http://www.nypost.com/seven/08102008/
business/lost_sovereignity_123879.htm

[Lobe Low]

This blog post would have more meaning to me if it were regionalized. I do not think LA County (or city) is represented by national averages. As someone in the market for a house, I think my experiences are closer to commenter "Laker" than to the main post. The affordable (to me, employed middle-income person) homes are in horrible condition (and usually in marginally horrible neighborhoods), and the decent homes on the market now are above $800K. To me the good homes are still overpriced by $100K or more.

[Craig Bradley]

The housing market has a long way to go before this correction or crisis is over. The last real estate cycle in Calif. was about ten years from top to bottom (1981-1990). The next cycle was 1991-2000. This one ended in most places by 2006. Add ten years or so, and you see when recovery might start: 2016. It takes around 4-5 years to hit bottom. We are not there yet.

The Fed could drag it out if they keep interest rates too low. Some further institutional cleansing is necessary, so more institutions need to fail or merge.

Even though the FBI noticed the increase in Mortgage Fraud building-up as recently as 2005, they were unable to act on the matter. Law enforcement is capable of mounting a mass response after a crime has occurred. No president is interested in proactive intervention in the markets. It runs against their grain, in this case, President Bush.

Further regulation of the financial sector appears necessary. However, this may make our markets less appealing to foreign buyers.

[sfvrealestate]

This is what I've been seeing for about the past six weeks, and this is why there is such a disconnect between real world/real time real estate and the (lagging)current statistics. The nice properties are going pretty quickly, sometimes even in multiple offers. The not-so-nice stuff is sitting. As always and no wonder.

However, Laker, appraisers can, and do, take into consideration a comp's condition. Always have. And with pictures and descriptions so readily available it's not hard to tell what condition a comp is in. For example, I just closed a transaction in Valley Glen. The house is very nice and had a really nice kitchen. It was listed for $659k and sold for $630k (the sellers expected it to sell for that price and are happy). It is merely a block away from two fixer foreclosures that listed and sold for considerably less. We had two appraisals, too.

[Nick]

It is kinda interesting that they would emphasize paying attention to the home inspection. Obviously people buying fixers are going to be paying a lot of attention to the specific problems, so I'd guess this is more directed at people buying flips, where the property looks good but may have problems which were "painted over". A down market is going to put a lot of pressure on flippers to cut corners, and the potential for fraud is kinda large.

Anybody know what the requirements are (permit/inspection wise) for "fix ups", and how to check if they were done to code, etc.? That might be a very valuable resource for anyone considering purchasing a property which was "recently renovated"...

[ronmbo]

Watch the miracle of recovery happen when the drain of
financial recources and young lives in no longer drained
by the war. The macro economy and the real estate
industry will slowly bounce back as a result.
The real question is will we all have learned a great lesson or continue with self-greed.

[jaded]

we're going to put our condo on the market in the next 4-5 months, and I've been watching condo sales in my zip code like a hawk. Yes, they are selling, perhaps not speedily, but at least they are selling. The prices are well off the insane highs they were in '06 and even through early '08, but they are not bottom of the barrel fire-sale prices, either.

If the unit is priced fairly and in good shape, it will sell. The ones that are lagging are those where the owner has made zero attempt to repaint, freshen decor, or even clear clutter. Just like any normal market.

Everybody obsessing about the "bottom" is going to miss it because it will not hit all areas uniformly. I firmly believe the bottom has hit my zip code--at least for condos--and prices are creeping back up. I have the sales data to prove it.

[John Bell]

The market will tank! I don't care what zip code you're looking at (except 90210 and other high end zips) or how nice the home is. Currently YOU CAN NOT get a $500k traditional 30 year loan unless you're making around $150k per year or you have a $200k deposit! Most sellers and realtors are completely delusional of the lending that is currently in place. There is still a lot of demand to purchase homes but most simply can't get loans to acquire them. That is why you're seeing so many homes under REO. The REO inventories will continue to climb until banks finally buckle and start accepting reasonable ($200k-$300k offers) for these homes. The majority in the LA area makes around $72k and the most they can qualify for is $300k with the current lending in place so until homes fall to the $200-300k ranges don't believe the hype and B.S.

[NObama]

Can't wait for the National Association of Realtors to "amend" this months report late next month. About two years in a row of their nonsense.

The housing market still stinks, and since every bank in the western world has no money to loan (they're all broke and begging for the Fed to print more money), the likelihood of short term improvement is zero.

What goes up must come down. Stuff will always sell at the right price.

[Laker]

jaded ,
What's the zip code?
If it is in Palmdale/Lancaster/Riverside/San Berdo.. then maybe (really maybe) you are correct.
If it is in any other area,. you 100% dead wrong.

[Anonymous]

FROM TODAY'S LA TIMES...

In California alone, lenders have foreclosed on $100 billion worth of homes over the last two years and are foreclosing at a rate of 1,300 houses every business day, according to a recent report from ForeclosureRadar.com

[Laker]

NObama said: "...since every bank in the western world has no money to loan (they're all broke and begging for the Fed to print more money)

NObama,
I'm not so sure about no money to loan. I'm getting 0% apr credit card mails like crazy. I actually had to change my mail box, as it was a relatively small one and could not fit all that junk. My postman was putting half of my mail in the box and half on the floor...
And this is not only me but also my other family and relatives. I'm not talking about $500 limit credit cards...I'm talking about $40,000-50,000 lines that i was able to get easy some for 18 month 0% apr and no transaction fees on BT. It seems they have a lot of money to give..just not for being secured by RE that the bank don't know how to find its true value....
I guess for them it is better to give money unsecured than giving money secured by houses in CA...

[Rational Renter]

Jaded - I'm sorry, but the bottom has not hit your zip code unless your zip code is outside of the greater Los Angeles area. And people waiting for the bottom aren't going to "miss it," as you claim. History tells us that bottoms are in for YEARS. You can't miss something that's going to last from 2010-2012.

[sfvrealestate]

"Anybody know what the requirements are (permit/inspection wise) for "fix ups", and how to check if they were done to code, etc.? "

Nick, this is a really broad question and code requirements often change. Buyers can always pull existing permits from the city, but it's also good to have a licensed inspector give his/her opinion. Even if an inspector recommends subsequent inspections, they should be able to tell if components are up to current standards/codes.

[Drew]

Sorry, but if anyone thinks "the market has 90% more to fall" they are living in a fantasy world.