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The National Association of Realtors® released its existing home
sales data for July on Monday. The numbers show that sales increased to the
highest level in five months, accompanied by a drop in prices. Read the complete
press release here: July Existing-Home Sales Show Gain.
According to the NAR data, the national median home sale price was down 7.1
percent from July 2007, proving again that lower prices bring more sales. In
contrast, the Flagstaff data for July residential real estate sales show a
significant drop in the number of sales from 2007, but an increase in the
median home price.
Lawrence Yun, NAR chief economist, said home prices in some regions of
the country could soon increase. “Sales have picked up significantly
in several Florida and California markets. Home prices generally follow sales
trends after a few months of lag time,” he said. “Still, inventory remains high
in many parts of the country and will require time to fully absorb.”
Indeed, the number of homes for sale nationally rose 3.9% in July compared to
June. However, the rise in supply results from a sharp increase in condo
inventory; the single-family supply declined. The Flagstaff inventory very
nearly matches the national supply – about eleven months’ worth of homes for
sale (homes for sale/homes sold in the last month).
In Flagstaff, we need to keep a close eye on the Phoenix market. I believe
that the Flagstaff market will not begin to recover until some months after the
Phoenix market turns around. Right now, the Phoenix area has a lot of inventory
to work through before that happens. Whether Flagstaff home prices will drop
further, or whether they will just remain stagnant, is impossible to
predict.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate
Specialists in Long Beach, Calif., said: “We hope the new tools in the hands of
home buyers from the recently enacted housing stimulus package will spark a
sustained sales uptrend in the months ahead.” Those “tools” consist of a $7500 tax credit (available to Flagstaff home buyers) and a property tax credit for those who purchase in 2008. | 
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