US Home Sales up-turn by 3.1% in July
At least a third of properties bought in July involved foreclosed homes snapped up at bargain-basement prices or homes sold at a loss by owners who had no alternative. This is known as a “Distressed Sale”. California and Florida have the highest percentage of distressed sales.
These sales helped depress home values across the country, feeding into a downdraft that is making it increasingly difficult for many Americans to sell their homes for more than they paid.
And there were signs that prices would continue to spiral downward for months to come. The number of homes and apartments for sale jumped 3.9 percent in July, adding to the supply glut that has bedeviled the housing market for months.
Sales of previously owned homes, which make up most of the nation’s housing supply, rose 3.1 percent in July, the biggest monthly increase since February 2007. Sales are running at a seasonally adjusted annual rate of five million units, the fastest in five months.
The figures suggested to some economists that the bulk of the decline in home sales had already occurred. It’s suggested that maybe the bottom has now been reached in the US market and now we will see things move gradually back up.
Around 40 percent of the house sales stemmed from properties where owners were forced to sell at a loss. For many owners, desperation appeared to be driving sales, which means prices are not likely to rise a great deal for some while. Distressed sales once accounted for so few transactions that economists for the association did not even measure them as a separate category until this year. But in July, the sales made up their largest percentage to date.
And many Americans may be waiting for prices to drop even further. The wave of foreclosures, coupled with tighter lending standards, has scared off many would-be purchasers from the market, which has entered its worst slump in decades. Demand may be slightly higher for condominiums and co-op apartments, sales of which rose 3.4 percent in July. Sales of previously owned single-family homes were up 3.1 percent for the month.
It’s believed there is still a considerable amount of time before prices sink to levels necessary to balance supply and demand in the US housing market.
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