In the midst of the more sobering economic news today – the Dow falling to a 21 month low point and GM’s sobering news (makes you wonder if that old saying “as goes GM so goes the nation” still holds water) – the NAR’s release of May existing home sales data has for the most part gone unnoticed by the mainstream media thus far today.  GM and Citibank were in fact both downgraded by Goldman Sachs today, spurring the tumble in the stock market;  the bulls ran away today.   

Back to the NAR’s report - existing home sales squeezed out a 2% month-over-month gain from April, but remains down an impressive 15.9% in the year-over-year numbers.  The NAR’s median price data suggests that nationally the median price has fallen 6.3% over the year.  Inventory changes were minimal however – down to 10.8 months nationally from 11.2 months in April, with some markets laboring under the strain of more than two years of inventory at this time.  It’s always interesting to read the quotes from the NAR leadership on the data – here’s one from Mr. Yun: 

Lawrence Yun, NAR chief economist, said there’s still a lot of inventory in the market. “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” he said. “Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”

We’d venture it will take much more than “several months” to draw down the inventory, particularly with currents trends in the financial markets.  Many different pundits and soothsayers will no doubt be tempted to call this the “beginning of the bottom”; again we say nay, and opine once more that will be a market by market call over upcoming years, not months. 

As we’ve been offering all along the past few months, there are markets out there that are in pretty darn good shape all things considered (both for multifamily and single family), and some that have much, much more pain to endure.  You simply have to drill down into the data and assess the situation market by market. 

Multifamily investors don’t mind the mess, and are busy searching for markets with the greatest promise – so are we. 

Here’s a short list of some “notable” economists’ reaction to the NAR news release over on the Real Times Economics Blog…..

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