| Non-Adjusted Existing Homes Sales Up in June |
| Written by Jonathan Smoke | |
| 07.24.2008 | |
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Discuss this article on the forums. (0 posts) The National Association of Realtors reported June sales today. They reported that total existing home sales fell 2.6% to a seasonally adjusted annual rate of 4.86 million units in June from a pace of 4.99 million in May.  While sales of condos were up slightly, sales of single family units declined 3.2% to a seasonally adjusted annual rate of 4.27 million in June from 4.41 million in May.Most have viewed today’s data as an indicator that within housing, things are getting worse. Hence, the S&P Homebuilders ETF fell 11% today. I will credit that we are seeing some positive interpretation today—mostly along a theme that conditions are not declining significantly and instead what we are seeing is a sideways movement. Translation: if we aren’t at a bottom, we’re likely close. Yet all of the focus I’ve seen has been on the relatively small nature of the declines that essentially show we have been bobbing up and down in the low percentages month to month. I’ve yet to see anyone point out that the declines are all coming from the seasonally adjusted data. Yes, we all fixate, and rightfully so, on the seasonally adjusted annual rates of home sales. Which means that the actual number of sales for the month are adjusted based on historical models to reveal what the annual rate of home sales would be had we had 12 months of “normalized” Junes. If you look at the non-adjusted totals, you see a more encouraging picture. Every month since January has shown improvement over the prior month. So, what’s happening in the seasonal adjustment is that we simply aren’t living up to the normal seasonal lift. Most builders and real estate brokers know that this year’s spring and summer seasons have been busts, so this isn’t news. The market just wants a reason to be negative. Maybe it has something to do with the billions that are about to be spent by the government in the new housing bill. By the way, if you check out the underlying non-seasonally adjusted data, total existing home sales were up 4.3% over June. They increased in every single region of the country, with the northeast clocking an 11% increase. I'm not saying that we shouldn't pay attention to the seasonally adjusted numbers since they are the best way to compare months in otherwise comparable periods. However, I do think we should take the non-adjusted data as an indication that even though we know the season hasn’t provided its usual bump, sales aren’t in fact getting worse. 
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