In July sales of existing homes (i.e. not newly constructed homes) rose 7.2%. That is their highest level in almost 24 months. This is the second consecutive month of positive sales figures.
Obviously one of the reasons that home sales are finally happening again is because prices have finally adjusted to market realities. That’s a convoluted way of saying that owners of homes finally got real in their pricing. Additionally, some of the pop is likely due to tax-credits that have made home buying more attractive.
Overall median prices dropped 15.1% from a year ago! While a depressing figure to folks who believed unbelievably inflated prices were a true reflection of the underlying value of homes, prices are now close to reality.
I cannot emphasize enough how important both of these statistics are. Both are strong evidence that capitalism is still alive and functioning well. When prices fell to reflect reality and not fantasy then transactions occurred.
Also implicit in these statistics is that loans must be being issued again to buyers. So this number also is a strong indication that frozen credit markets are thawing.
I hope that everyone has an excellent weekend!
Jason
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