Existing homes inventory at 16 year high

The National Association of Realtors (NAR) reported existing-home sales slipped 0.2% to a seasonally adjusted annual rate of 5.75 million units in July from an upwardly revised pace of 5.76 million in June, and are 9.0% below the 6.32 million-unit level in July 2006.

The national median existing-home price for all housing types was down 0.6% from July 2006. Economists The results were stronger than the 5.69 million sales pace expected by economists surveyed by MarketWatch, however they are still the lowest since November 2002.

So basically sales and prices were flat and economists were on the mark. As always however remember these numbers are subject to significant error.

The highlight of the report was that inventories of unsold single-family homes increased by 2.2% to 3.85 million in July, representing 9.2 months worth of supply and the highest level in 16 years.

For some interesting graphs on existing home sales see this article at Calculated Risk. The point below was of interest as far as what to expect in the coming months:

Note: For existing homes, the sales data is compiled at the close of escrow. So this report is mostly for homes were the sales agreements were signed in June or even May. This is all pre-turmoil, and even the August existing home report will be mostly pre-turmoil.

So from that we can conclude that the worst is yet to come and it looks like we won't get a clear picture of how bad it will get until at least October when we see the numbers for September.

If you're still craving more information on existing home sales (I know I am) check out this post at the same blog for more pretty graphs and insightful commentary. I found this tidbit quite interesting:

To reach the NAR forecast, revised downward again on Aug 8th to 6.04 million units, sales would have to be significantly above the 2006 levels for the remainder of the year. Given tighter lending standards, we can probably already say that even the August NAR forecast was too optimistic.

Too optimistic? That's being kind, how about not even in the ballpark? By the way if you haven't already checked out Calculated Risk - a good read with some great links.