Talk about double dipping. The numbers are just in from Data Quick and it seems July saw a dip in both the number of home sales and the median sales price in Southern California. Sales were down a steep 21.4% last month from the year before. Median price fell 1.7%, or about $5,000 in one month. Usually price declines lag a dip in home sales by 12 to 18 months and it is highly irregular to see both indicators dip simultaneously. Sales seem to have dried up due to the government tax credit ending, and prices are falling as more foreclosures flood the market.
It is also interesting to note that July is usually a busy month in real estate with summer sales. When we see the market in free fall during what is supposed to be the peak buying season, it is telling us homes are too expensive without government intervention. Now that the tax credit is no longer available, prices are forced down. Meanwhile, newly released jobless numbers show there were 500,000 new applications filed for unemployment insurance last week. That alone was enough to send the DOW tumbling 145 points yesterday.
It looks as though we have just have entered a double dip in Southern California housing. Expired subsidies, record foreclosures and rising unemployment have bum rushed the barricades just as we begin our slide into the seasonal downturn. We might even say that rather than seeing a double dip we are merely witnessing a continuation of the downward slide we were already on. I’m afraid there is no dam strong enough to hold back this raging river. Home prices will continue to fall.
Southern California Home Sales and Median Price Dip in July
August 17, 2010
Jobless Claims in US Rose to Highest Since November
Bob Willis and Courtney Schlisserman
August 19, 2010