I think we can officially call July sales a little bit ugly. To sellers, it must have seemed like everyone left town for the month.
Based on the Cincinnati MLS numbers, the total number of sales (closings) in July fell 31% from last July. On top of that, the inventory went through the roof - sorry, bad pun - rising to 11.6 months based on the sales rate.
See Cincinnati MLS-based charts here.
The national picture wasn't any better. New home sales tanked to an all-time low of 279,000 homes at an annualized rate. Existing home sales fell 27% on a year over year basis.
The rough July wasn't unexpected, of course. For some time now the message has been that the tax credit pulled sales forward. A look at year-to-date numbers would seem to confirm that as the total sales are slightly ahead of where we were last year at this point. That made agents, title companies, and lenders scramble early in the year while we ended up with a long summer vacation.
Was there any good news in there? Well, yes, actually. As we began to see in last month's report, pricing continued to move up, albeit ever so slightly. It might still take a little while before it all comes together, but stable pricing could be the leading indicator for housing to head back to some kind of normalcy. (If you follow the stock markets, you may have noticed that home builder stocks rose following the recent reports as investors took the numbers as signs of a bottom.)
I don't expect August statistics to be quite so severe given that activity levels seemed to increase this month, but I wouldn't be looking for a quick snap back either. Once the bubble effect from the tax credit clears out, we'll probably see a continued move back to levels of a year ago with some pickup in sales towards the end of the year. My crystal ball isn't terribly reliable, but if I had to guess, I'd say that if mortgage rates remain low then we could see a real spring market next year, not one based on artificial stimulation.