Top home selling markets are of interest to property investors as they indicate the locations that have the strongest momentum in terms of residential sales. However, it should be kept in mind that often stronger sales do take place because of larger drops in prices.
Home sales (including single-family homes, apartment condos and co-ops) increased all US regions but the West during the second quarter of 2009 according to recent data provided by the National Association of Realtors (NAR).
The top house selling region was by far the Northeast where home sales increased 15% in the three months to June 2009, while the increase in home sales in the two other regions was only 3-4%.
The variation in US home sales dynamics was even greater across the 51 states. In particular, changes in home sales in the second quarter of 2009, ranged from a 24% drop in Alaska to a 67% increase in Idaho. The second and third worst performing states were Wyoming and California, as home sales dropped 19.2 and 8.2% respectively. Home sales declined in 8 more states and particularly, in ranking order from worst to best, in Colorado, Michigan, Georgia, Missouri, Alabama, Ohio, Minnesota, and Virginia.
On the contrary, seventeen states registered over 10% increases in home sales, while eight states registered increases in home sales in excess of 15% during the second quarter of 2009. These eight "top home selling" states and the respective quarterly increases in house sales are indicated in the graph below.
Figure 1. Top Home Selling States, Q2 2009
Sources: NAR, Property-Investing.Org
Looking at the percent change in sales during the three months of the second quarter can be quite misleading. We need to look also at the level of home sales achieved during those three months (seasonally adjusted and annualized) relative to the level of sales in earlier years such as 2006, which registered in all states the highest level of home sales, during the period 2006-Q2 2009. When we do that, we see that despite the strong growth sales in the "top home selling" states their seasonally adjusted and annualized level of home sales in Q2 2009 was still significantly below their 2006 level, as indicated in the graph below. Notice that Idaho that registered by far the largest quarterly increase in home sales registered also the second largest decrease of 52.5% in home sales compared to the levels achieved in 2006. The state that registered the largest drop of 52.8% compared to 2006 levels was Washington.
Figure 2. Top Selling States Q2 2009: Changes in Sales 2006-Q2 2009
Sources: NAR, Property-Investing.Org
The graph below portraying the 10 states that by Q2 2009 exceeded 2006 home sales levels or decreased the least from those levels, reflects surely a different picture in terms of what can be defined as "top home selling" market. It is interesting to highlight California which on a quarterly basis was the third worst performing state with an over 8% decline, but was the third best performing state in comparison with the level of home sales achieved in 2006. The top state from that point of view was Nevada, which by Q2 2009 had registered a 43% increase in house sales.
Figure 3. Top States in Terms of Home Sales Changes 2006-Q2 2009
Sources: NAR, Property-Investing.Org
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