by Pete the Banker
In July, existing home sales declined 27% from June. Here. New home sales declined 12.5% from the prior month.Here. Foreclosure filings increased 25% and an estimated 23% of homeowners nationwide were underwater on their mortgage, their loan balance exceeding the value of their home. Here.
Yet the alleged bright spot in housing trumpeted by President Obama and his Administration is that home prices have consistently increased month over month since the first of the year, an indication of the success of the Administration’s housing policies and a stabilized housing market. Here.
However, Diane Olick the CNBC Real Estate Reporter recently looked deeper into the recent sales numbers stating that,
“It’s not true stabilization because of the mix factor. Take a look at a breakdown of what sold in what price range.”
“As you go from the $100,000 range on up, ($100,000 and below are likely mostly foreclosures) you see the sales drop moderate with each rising range; when you get to $1 million+ the sales numbers are actually up. Sales distribution consequently moved in July, with the percentage of homes in the $500,000+ range growing in share, and those under $500,000 losing share from June.So yes, home prices rose ever so slightly, but also artificially.” Here
Olick went on to write that with the record 12 1/2 month supply of homes, unemployment, and falling consumer confidence that prices will be under continuing pressure.But what she left unsaid is that the apparent disparity between lower and higher price homes shown in the above chart also suggests that the Administration’s short term housing policies have failed. Lower priced homes, the focus of most government intervention, have demonstrated declining prices. Higher priced homes above $750,000 which are less subject to government policy have seen prices decline less significantly or shown actual appreciation. This suggests that the market works absent government interference.
Tell ’em where you saw it. Http://www.victoriataft.com