ChitownLiving | Chicago Real Estate + Life

Some mixed economic news for the housing market this past week.  Most encouraging is the rise in the Pending Home Sales Index. Prices - Moody’s reports that median housing prices are expected to decline 10% over the next few years in 100 US cities.  Happy to report that Chicago is absent from the report. Sales and Prices - NAR reports that existing home sales and median home prices declined.

Total existing-home sales — including single-family, townhomes, condominiums and co-ops — slipped 0.5 percent in August to a seasonally adjusted annual rate of 6.30 million units from a level of 6.33 million July. Sales were 12.6 percent lower than the 7.21 million-unit pace in August 2005, which was the second highest on record.

They go on to say…

The national median existing-home price for all housing types was $225,000 in August, down 1.7 percent from August 2005 when the median was $229,000. The median is a typical market price where half of the homes sold for more and half sold for less.

Regionally they go on to report…

Regionally, existing-home sales in the Northeast rose 1.9 percent to a pace of 1.07 million in August, but were 11.6 percent below August 2005. The median existing-home price in the Northeast was $271,000, down 3.9 percent from a year earlier. Existing-home sales in the Midwest rose 0.7 percent in August to a level of 1.44 million, but were 11.1 percent lower than a year ago. The median price in the Midwest was $176,000, which is 1.1 percent below August 2005. Existing-home sales in the South slipped 0.8 percent to an annual sales rate of 2.51 million units in August, and were 7.4 percent below August 2005. The median price in the South was $184,000, down 2.6 percent from a year ago. Existing-home sales in the West dropped 2.3 percent to an annual pace of 1.29 million in August, and were 22.8 percent lower than a year earlier. The median price in the West was $345,000, up 0.3 percent from August 2005.

Pending Sales - NAR reports that the Pending Home Sales Index rose 4.3% in August.

NAR’s Pending Home Sales Index, based on contracts signed in August, rose 4.3 percent to a level of 110.1 from a reading of 105.6 in July, but is 14.1 percent lower than August 2005.David Lereah, NAR’s chief economist, says the higher index reading is a hopeful sign for the real estate market.“Our sense is that home sales may have reached a low in August,” he says. “The Pending Home Sales Index shows home sales should be fairly stable over the next two months, although a minor decline is possible. 

Regionally they go on to report…

Regionally, the index reading for the West rose 9.2 percent in August to 112.7 but was 16.9 percent below August 2005. The index in the South increased 4 percent to 126.8 in August but was 9.4 percent below a year ago. In the Northeast, the index rose 3.6 percent in August to 95.4 but was 12.4 percent below August 2005. The index in the Midwest was unchanged at 93.8 in August and was 20.4 percent lower than a year ago.

The Fed Speaks - Wednesday, Fed Chairman Ben Bernanke stated that the housing slump could reduce GDP by 1%.  More commentary at The Mortgage Reports.  But today, former Fed Chairman Alan Greenspan comments that the worst could be over as weekly mortgage applications have flattened. I love economics, all a big guess at this point.  Stay tuned for more econobabble.