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Existing home sales slump lower than expected, cancellations plague market



Seattle real estate signs, photo by AR McLin.

Existing home sales slump

Pointing to cancellations of pending contracts as the current depressor of existing home sales, the National Association of Realtors reports today that sales dropped 3.5% in July.

Compared to July 2010, sales have dropped 21% with the primary cause echoing last month’s challenge of “cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price,” NAR said.

Economists polled by Reuters prior to the news today had anticipated sales to rise 3.8% after June sales performed better than expected.

The national median price for existing homes fell 4.4% from July 2010 to $174,000 and distressed homes accounted for nearly a third of all sales in July.

Homes under $100,000 rose 24.6% in sales volume nationally while higher price ranges dropped a bit.

Regional home sales vary

Regionally, performance varied. In the Northeast, sales rose 2.7% in July, propped up by a 32.5 percent increase in the $100-250K range, while homes over $1M declined 8.4 percent in sales volume.

The Midwest only rose one percent in July, but a big win for the region is that no price range dropped and the $100-250K range actually rose 37%.

The South saw a 1.6 percent drop in July and while the $100-250K range is up 18% in sales volume.

The hardest hit area currently is the West region where home sales dropped 12.6% in July. Sales in the $0-100K range skyrocketed 59.7% while higher range prices dropped, so this region is seeing lower sales volume at lower prices.

July metro area existing single family homes

Sales and prices, seasonally adjusted:

Why buyers are held back despite affordability

Dr. Lawrence Yun, NAR chief economist, said there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said.

“Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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  1. Augusta Real Estate

    August 18, 2011 at 2:02 pm

    Wow those are some pretty scary numbers. One reason for the higher 2010 home sale numbers was the $8000 tax incentive. I remember reading a number of blog articles were the commenter's couldn't wait to get rid of the tax incentive. Never could understand why that was. The tax incentive didn't put a bigger burden on tax payers, those dollars were already appropriated through the $800 Billion Dollar Spedulus Plan. Be Encouraged, this will turn around!!!

  2. Jboy

    August 18, 2011 at 3:41 pm

    I agree with Augusta Real Estate, pretty scary numbers. If you look at the historical trend regarding prices of homes and annual household earnings the disparity becomes much more visible. The "housing bubble" began in the ninety's and steadily increased from that point on driving the prices of homes to an abnormally inflated number. In the past prices of homes typically trends with annual household income, as it should. Only in the late ninety's and two-thousands did the disparity become obvious. Thankfully, the two trending numbers are much closer now, than than they have been in the past five years. There still may be a marginal decrease in value before we see a true turn-around.

  3. Manley Realty

    October 11, 2015 at 1:54 pm

    The numbers look way off.

    • Lani Rosales

      October 17, 2015 at 8:29 pm

      This story is from 2011, so they’re accurate for that time, but you’re right, for today, they’re off 🙂

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Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?



Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.



aging housing inventory

aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.



zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub,, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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