Housing prices increased 7.6%, but home sales still 20% off 2009 numbers

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July, but remain 19.0 percent below the 5.10 million-unit pace in August 2009.

BOTTOM LINE

The homebuyer tax credit is over.  If you notice that we are still 20% below last year.  Last year was a terrible year to buy a home, as will be 2010.  Real home prices can follow long term cycles which can last several years.  It is our opinion that housing prices still have 20%  more to fall before they can stabilize. 

The tax credit was attempting to stimulate purchasing, which it did, but since this kind of stimulus cannot last forever, home prices fell dramatically when it was lifted.  Consider this month as dead cat bounce in housing.  The folly of trying to micromanage the economy with this tax credit, which is essentially what what we are doing, is that it was artificial meddling that got us into this mess (think Community Reinvestment Act), and somehow meddling is going to get us out.

Local Data

Home sales change from one year ago.  
Atlanta: -10.1%
Baltimore: -11.3%
Boston: -16.9%
Cincinnati: -25.9%
Dallas-Fort Worth: -16.8%
Houston: -17.4%
Indianapolis: -19.8%
Kansas City: -24.7%
Miami-Ft. Lauderdale: -3.7%
Minneapolis-St. Paul: -34.2%
New Orleans: -19.8%
New York-Northern New Jersey-Long Island: -16.6%
Philadelphia: -25.2%
Phoenix: -11.9%
Portland: -25.7%
San Antonio: -6.8%
San Diego: -1.0%
St. Louis: -25.2%
Washington, DC: -9.7%

Home Prices change from one year ago
Atlanta: -14.3%
Baltimore: -1.4%
Boston: 5.2%
Cincinnati: -0.7%
Dallas-Fort Worth: 1.9%
Houston: -1.4%
Indianapolis: 1.9%
Kansas City: -4.0%
Miami-Ft. Lauderdale: n/a
Minneapolis-St. Paul: -1.6%
New Orleans: 1.0%
New York-Northern New Jersey-Long Island: 3.3%
Philadelphia: 6.8%
Phoenix: -1.4%
Portland: -0.9%
San Antonio: 7.5%
San Diego: 2.4%
St. Louis: 2.0%
Washington, DC: 5.4%

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