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Sales pairs slow down markedly in July
Each month we publish the number of sales pairs used in the calculation of the S&P/Case-Shiller Home Price Indices. Data are collected on sales of specific single-family homes or condos. Each sale price is considered a data point. When a home is resold, months or years later, the new sale price is matched to the first price creating a sales pair.
The chart below makes it clear that home sales have slowed down quite a bit over the past three years and quite dramatically in July 2011 (the rightmost data observation on the blue and red lines) versus that month’s historic past.
The volatility of the graph shows that the housing market does behave with a distinct seasonal pattern. For both the 10- and 20-City Composites, sales volume peak around August of each year (the high points of each line, each year) and are at their lowest around February (the low points).
From 2000 until the 2006 market peak, July sales pairs ranged from about 70,000-100,000 for the 10-City Composite and about 110,000-175,000 for the 20-City Composite. Once the market collapsed, we saw the 2008-2010 July transaction volumes fall to about 50,000 for the 10-City Composite and 95,000 for the 20-City Composite, well below the lows of the prior ranges. July 2011 data, released on September 27th, show an even further slow down with only about 43,000 sales pairs counted in the 10-City Composite and 78,500 in the 20-City. Unless we receive more information on transactions that closed in July with next month’s report, the further decline in these data are troubling. Like starts and other sales data, the S&P/CS sales pairs must return to more historic norms for any sort of real recovery to materialize.