Rise in existing home sales is likely a fluke

New York /
Sep.September 22, 2011 10:40 AM

The sudden jump of existing home sales in the U.S. in August was probably a fluke, according to CNBC, and evidence suggests sales will decrease back to shaky levels next month.

Sales rose 7.7 percent month-over-month in August, but brokers say its largely because of delayed sales from the spring. The data reflects signings that may have taken place in May and June, before the global economic turmoil resurfaced in August.

And don’t look for the trend to continue. Consumer confidence has dipped, and the new conforming loan limit means fewer buyers will have access to financing. Also, sales contract cancellations have increased. In fact, 18 percent of realtors reported a cancelled contract, nearly five times the typical 4 percent rate.

“Given the recent sharp falls in equity prices and consumer confidence, there is a real risk that the 7.7 percent month over month rise in existing home sales in August will not be sustained,” says Paul Dales of Capital Economics.

And with distressed properties still comprising one-third of all sales, it’s also unlikely price will move upward anytime soon. [CNBC]


Related Articles

arrow_forward_ios
Photo illustration of Fredrik Eklund and Dottie Herman (iStock, Getty)
Douglas Elliman expands into tight Texas housing market
Douglas Elliman expands into tight Texas housing market
(iStock)
Hot, hot, hot: Resi market sets new price records in March
Hot, hot, hot: Resi market sets new price records in March
The housing market needs 3.8 million single-family homes to meet current demand (iStock)
US needs 4M homes to meet demand from buyers
US needs 4M homes to meet demand from buyers
G&M Realty's David Wolkoff (Getty, 5Pointz LIC)
Wolkoff’s $300M for 5Pointz tops outer-borough loan list
Wolkoff’s $300M for 5Pointz tops outer-borough loan list
Brooklyn saw increases in prices, sales and inventory. (Getty, Two Trees)
Brooklyn’s median sales price hit record high in Q1
Brooklyn’s median sales price hit record high in Q1
The Promenade on the Peninsula in Rolling Hills Estates, California (Google Maps, iStock)
Landlords take on short-term debt to spruce up struggling assets
Landlords take on short-term debt to spruce up struggling assets
TRD Tips: How to manage when you’re a landlord late on the loan
TRD Tips: How to manage when you’re a landlord late on the loan
TRD Tips: How to manage when you’re a landlord late on the loan
(iStock)
South Florida hits record $5B in residential sales volume in December
South Florida hits record $5B in residential sales volume in December
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...