Investors, Market, News

Existing-home sales down in 2.6 percent in June

Sales of existing homes slowed more than expected, according to the latest monthly report by the National Association of Realtors.

In June, the pace of home sales nationwide dropped 2.6 percent from May to a seasonally-adjusted annual pace of 4.86 million. Economists had predicted that sales would drop to 4.95 million. The rate was 15.5 percent below the number of homes sold last year.

In the south, existing homes sales fell 3.1 percent from May for a year-over-year decline of 18.1 percent.

More troubling for homeowners and real estate investors looking to sell their properties, the number of homes on the market swelled to 4.49 million – which represents an 11.1-month supply of houses for sale.

With supply increasing and demand stagnating, if not falling, home prices, as measured by the NAR, are falling as well. Nationwide, the median price of a home fell 6.1 percent from last year to $215,100. In the south, prices are down 2.4 percent to $185,300.

Blamed by the NAR for lackluster sales are potential buyers waiting on the sidelines, expecting prices to continue to drop. While additional downward movement in home values is almost certain, it is the problems in the credit markets which are driving home sales numbers. With down-payment requirements increasing and mortgages harder to come by, a great number of home buyers are simply shut out of the market.

Still, the report underscores the fact that in order to sell a house, investors have to be incredibly competitive on price – or be open to alternative financing methods such as lease-options and wrap mortgages.


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