Measured by the number of closed transactions, existing home sales have largely stalled over the several years. The chart below clearly illustrates how sales slowed down over the past four years and quite dramatically in the summer of 2011 (the rightmost data observations on the blue and red lines) versus their historic past. The latest data are for September 2011, released with the S&P/Case-Shiller Home Price Indices on November 29th.
The volatility of the lines is due to the seasonal pattern of the housing market. 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 mid-2006 market peak, the 10-City Composite September sales pairs ranged from about 70,000 to 105,000 and the 20-City Composite from about 110,000 to 180,000. Once the market collapsed, we saw the 2007-2009 September transaction volumes fall to about 55,000 for the 10-City Composite and 100,000 for the 20-City Composite. September sales data in both 2010 and 2011 show an even further slow down with an average of 44,000 sales pairs in the 10-City Composite and 77,500 in the 20-City Composite.
Existing home sales reported by the National Association of Realtors tells the same story, as the chart below illustrates.
- U.S. Existing Home Sales. Sources: National Association of Realtors.
Beginning in 2000 existing home sales rose from about 4.5 million to their late-2005 peak of 6.34 million (these data are seasonally-adjusted at annual rates). Once the market turned, sales volume fell back to a level of about 4.0 million in late 2008. From there, sales rose through 2009; but, like other housing statistics, this brief rally appears to have been largely due to the homebuyers’ tax incentive. As of October 2011, existing home sales are about 4.4 million, which is close to the average of the prior two years.
According to these two statistics above, existing home sales appear to have flatlined at relative lows.