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August 24, 2010: Housing Sales Drop In July According to the National Association of Realtors, home sales in July fell 25.5 percent from July 2009, and were down 27.2 percent from June of this year. It was expected that sales would drop for July because that was the first month to reflect the end of the government tax credit, but the consensus was for only a 13 percent drop. What makes this drop even more disheartening is that July is normally when housing demand peaks. While even before the July numbers most analysts were expecting prices to drop a bit more this year, they are now suggesting that a further 10 percent drop in prices, or more, would not be unexpected.
Putting the July sales number in perspective, this is the lowest sales rate for single family homes since 1995; and even though the number of homes listed for sale did not increase much, because of the lower rate of purchases, the inventory level is now at 12.5 months. A normal market has an inventory level of less than six months.
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