Fewer single-family homes were sold in July as compared with July of last year, as reported by the South Florida Business Journal. Specifically, statewide sales of single family homes fell by 14% in July, to 13,589 from 15,762 just a year ago.
According to the USA Today, home sales plunged to record lows as buyer demand eroded after the expiration of a federal homebuyer tax credit. Sales on existing homes tumbled nationally 27.2% in July.
Existing home sales also fell in South Florida, with Fort Lauderdale taking the biggest hit. Fort Lauderdale saw a 21% downturn, with just 720 homes sold in July, compared with 907 sales in July of 2009.
Real estate sales are at the lowest level since the total existing home sales series launched in 1999, and single-family home sales are at the lowest level since May 1995. These numbers are particularly troublesome given that mortgage rates have been at historical lows for some time now.
As we have previously posted, there are many factors that are driving today’s unstable real estate market. But one of the most crucial factors is the continued instability in the job market. Until the economy as a whole improves, our real estate market will remain volatile.
Part of the volatility that is currently being experienced in the real estate market can also be attributed to the expiration of the federal home buyer tax credit. However, the drop in real estate sales – for whatever reason – is still a troublesome sign to our housing recovery.
Another possible explanation for the current volatility in the housing market is that we are beginning to experience a standoff between both buyers and sellers. Many sellers are reluctant to lower their prices. And buyers are hesitating because they think home prices have not bottomed out. This standoff will no doubt fuel further instability in our housing market.
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