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Sliver Lining of Existing Home Sales

The headline news of this morning's NAR reports on US existing home sales did not paint a pretty picture at all for current US real estate markets. The existing home sales tumbled to the lowest level since data was compiled in 1999. The median home price dropped more than 6% from previous year. The report seems providing no indications the ending of housing market slide. However, if there was any silver lining from this report, it was the single family home prices had stabilized and actually on a gradual climb monthly since the 1st quarter. The chart below depicts single family median and average price monthly change since the end of 2007. As the chart showed that home price dipped the most in Jan, then had been increasing month over month since.




News media picked up the headline numbers of y-o-y declining 6.1% for median price and and 16.7% drop in total sales. But it is quite evident that entering the second quarter this year the speeds of declining home price had decelerated significantly. Existing home prices actually increased month over month since March. Certainly this might have something to do with seasonality and weather. If we examined the yearly price changes (which minimize seasonal factor, see chart below), it also showed that the price deterioration was slowing since March. The trend of price increasing should not be overlooked. Are we at the end of worst housing market? Not quite sure, but I guarantee we are closer to the bottom than one quarter or one year ago:)

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