June home sales data are out and a few news organizations are clinging on an increase in sales between May and June, pointing to signs of optimism. This lacks the proper perspective. Even in very bad markets, some months will be up over the previous month. A previous post explained that quarterly data (but preferably half-yearly data) is a more reliable guide for the market’s direction than monthly data.
For some perspective, let’s compare the first six months of this year and the first six months of last year, based on data compiled by Lakeshore Analytics:
- The total number of homes sold is down 23 percent
- The total number of existing condominiums and townhomes is down 34 percent
- The total number of new condominiums sold was 411 (not a typo), down 75 percent
- The median price of a condominium was down 11 percent
- The median price of single family homes was down 34 percent
In light of this, it is highly misleading to latch onto a market increase between May 2009 and June 2009. Future posts will show some more of this data in detail, but in the mean time, news accounts showing optimism in the housing market should be read with the highest degree of skepticism.