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September 07, 2008
A Release on Home Sales We Missed Shows Pennsylvania Home Sales Down by 18 Percent
On August 14th the National Association of Realtors(NAR) released data on total sales of single-family homes, apartment condos and co-ops by state, we missed it because we were busy writing the State of Working Pennsylvania.
According to the data Pennsylvania home sales in the second quarter were down 18 percent from the second quarter of 2007; sales were down overall in the Northeast as well as in all of Pennsylvania's neighboring states (Figure 1).
(See a larger figure)
With such dramatic declines in sales, there has to be downward pressure on Pennsylvania home prices. On the same day the NAR also released to the public data on median home prices in a few selected Pennsylvania metropolitan areas (Figure 2).
Adjusted for inflation, median home prices were down in every Pennsylvania metropolitan area for which the NAR released data to the public(Figure 3).
Some caution is warranted when examining NAR data on home prices as it is sensitive to changes in the composition of home sales. For instance the NAR data showed median prices initially rising during the early stages of the collapse of the housing bubble in California, a result that stemmed from the fact that the sales of lower priced homes slowed dramatically while higher priced homes continued to turn over thus raising the median home price.
Most economists that track changes in home prices rely the S&P/Case-Shiller and the Office of Federal Housing Enterprise Oversight (OFHEO) home price indices which are both designed to avoid the problems of the NAR data. Monday or Tuesday the Keystone Research Center will release its own analysis of data from the OFHEO on price changes in the 16 Pennsylvania Metropolitan areas. Stay tuned!
--Mark Price
Posted by Price at September 7, 2008 03:21 PM