Seattle real estate signs, photo by AR McLin.Existing home sales dropped in June, as “contract cancellations spiked unexpectedly, although prices were up slightly,” according to the National Association of Realtors.
Sales varied between regions and despite a slight rise in sales in the South and Midwest of 0.5% and 1.0% respectively, sales declined 5.2% in the Northeast and 1.7% in the West. This puts sales at 17% below June 2010 for the Northeast alone, despite a 3.1 % rise in median price.
NAR reports that single family home sales were relatively stable but the condo sector was weakened with the total existing home sales dropping 0.8% in June and 8.8% from June 2010.
Distressed sales are holding steady, accounting for 30% of all sales while first time buyers account for roughly a third of all sales, both of which reflect similar numbers over the past 12 months.
Lawrence Yun, NAR chief economist, said, “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” he said. “The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year.”
Yun cited other factors in the sales performance. “Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be higher. “With record high housing affordability conditions thus far in 2011, we’d normally expect to see stronger home sales,” he said. “Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”
This article published on Wednesday, July 20th, 2011 at 11:04 am | Contact the editor Tags: existing home sales, featured, Real Estate NewsCategory: News
Tara Steele is the News Director at AgentGenius, covering real estate news, technology news and everything in between. If you’d like to reach Tara with a question, comment, press release or hot news tip, she frequently checks her email, simply click the link below.
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