Sales of single-family existing homes plummeted 27% in July from the previous month as the expiration of homebuyer tax credit sucked all the oxygen out of the market. The sales reading was the worst in 15 years.
"Hopefully this pause will last two to three months and not longer," said National Association of Realtors (NAR) economist Lawrence Yun.
Barclays Capital analysts noted that, "Overall, the July report was notably worse than expectations and shows that the housing market has not yet found a bottom following the end of the stimulus measures."
According to figures compiled by NAR, sales fell 7.2% in June and 1.6% in May after the expiration of the tax credit on April 30.
NAR said sales of previously owned single-family homes fell to a seasonally adjusted annual rate of 3.37 million in July from a 4.62 million rate in May.
Sales of existing condominiums and co-ops fell 28% in July from June. The big drop in sales was expected after RE/MAX reported last week that its sales had dropped 30% in the month of July.
Consumers remain skittish about the value of residential real estate and with the national unemployment rate stuck at 9.5% job concerns remain pervasive throughout most of the nation.
There is also no relief for new home sales in the Golden State. New home sales in California slipped again in June, according to the latest report from the state's builders.
The monthly report compiled by Hanley Wood Building Intelligence for the California Building Industry Association (CBIA) found that state-wide, new homessales were down 36% in June, when 2,454 deals on single-family houses andcondominiums went to settlement. Last June, 3,848 closing were recorded.
On a month-over-month basis, however, sales were up 2.7% from May, when 2,399 new units were sold in the state.
On a year-over-year basis, though, single-family home sales fell 17%, while townhouse sales were off by 57%. Condo sales declined by 67%. Jonathan Dienhart, director of published research for the Costa Mesa-based HWMI, said the figures for June were a continuation of the most recent downward slump in housing.
"We're still in the doldrums," Dienhart said. "The summer of 2010 is looking to be an extended hangover from the federal tax credit expiration and ongoing economic strife. Until the job market turns around and distressed property sales subside, it will be hard for California's new-home market to show meaningful signs of recovery."
Liz Snow, CBIA's president, said she was encouraged by the May-to-Juneincrease in sales. But she, too, said that her members "continue to struggle" in the wake of the poor labor market.
"Until consumers become more confident in their job security and job prospects, we don't anticipate they'll be rushing out to buy a home," she said.