Tuesday, August 24, 2010

FLASH

Really Bad Number

Released on 8/24/2010 10:00:00 AM For Jul, 2010
Consensus Consensus Range Actual
Existing Home Sales - Level - SAAR 4.650 M 3.960 M to 5.200 M 3.83 M
Existing Home Sales - M/M Change -27.2 %
Existing Home Sales - Yr/Yr Change -25.5 %

Highlights
It doesn't get worse than this. Existing home sales fell 27.2 percent in July to a 3.83 million annual rate for the lowest level in 15 years. The 3.83 million rate compares with expectations for 4.65 million. Supply at the current sales rate ballooned from June's already swollen 8.9 months to 12.5 months for the worst reading in 11 years.

Yet prices showed little effect, down only 0.2 percent to a median $182,600 and reflecting relative strength for higher priced homes. The year-on-year median price edged lower but was still positive at 0.7 percent. Yet "was" is the word to note as extremely heavy supply, together with heavy foreclosures and distressed sales, point squarely at price pressures ahead.

There's nothing to explain away July's collapse. Single-family and condo sales show nearly the same deterioration. Regional data show no substantial variation. Stocks are moving lower and money is moving to safety in immediate reaction to this report, one that marks a new bottom for the run of disappointing economic data. The street was looking for an improvement in tomorrow's new home sales report but that's definitely now an outdated consensus.

Dan Perkins

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