Nationwide, the number of existing home sales in July – one of our busiest months for closed sales - rose 7.2% from last month and 5% from a year ago. That translates into an annual rate of sales this month of 5.24 million; July a year ago = 4.99 million; in 2005 = 7.05 million of annual sales. So from our peak annual sales year we are seeing 26% fewer homes sold. Ouchh!
In the West (including California and Arizona, don’t forget) sales actually dropped by 1.7 % . July median prices dropped 28% from a year ago to $202,300. That is down 6% from a month ago when the median price was $214,800.
Closer to home in King County the number of closed sales rose by a smaller 4% : from 2083 in June to 2161 in July. The increase was 6% from a year ago July. The $250,000 to $350,00 had the largest share of action.
Median prices in King Country were higher than in the West as a whole - $350,000 in July. That was down from June’s $363,116 and from a year ago median price of $401,000. This followed the nationwide pattern, where the median price dropped 15% from a year ago to $178,400. Our median price dropped slightly less – 13% from a year ago. Statistics provided by National Association of Realtors
While we don’t have distressed sales numbers for the local area, nationwide the calculation is 31% of all sales were distressed. 30% were first time home buyers. With all the stimulus provided by the first-time buyers’ credit, low interest rates boosted by the Fed bond market supports and prices lower than at any point back to 2004 you would expect a rise in the number of sales. The big question is what happens when these government supports go away in October and November of this year? We saw what happened to the clunker program. The money was used up in a flash, or actually in two flashes. The second round of 2 billion went in two weeks, instead of the anticipated two months.
The biggest factor to keep an eye on is the foreclosure and delinquency rates. The percentage of residential mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded by the Mortgage Bankers Association, the industry group reported on Thursday. Foreclosures are now 4.3% of all mortgages. What surprised most was the rise in the prime, fixed rate loans, typically taken out by well-qualified buyers. They now account for one in three of all new foreclosure starts – up from one in five a year ago
The chief economist for the Mortgage Brokers Association isn’t seeing a lot of hopeful signs out there. He noted that during much of 2008, foreclosure starts were flat. They began to go up this year after the foreclosure moratoria imposed by Congress and some self-imposed by banks were removed. In Florida, 22.8% of mortgages are delinquent or in foreclosure. Does anyone remember the Marx Bros movie, Cocoanuts? Groucho auctions off Florida lots to buyers as far north as Minnesota in a spoof on the big land boom/bust of the late twenties. A great movie for our times!
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