I read a couple of reports about US real estate sales in July that at first glance appear to be at odds. CEP News reports that existing home sales in the US increased by 3.1% in July.
U.S. existing home sales rose more than expected to 5.00 million units in July, a 3.1% gain in the month, following June's revised sales figure of 4.85 million. With that gain the index rebounded to the highest level in five months, although the range in the past 11 months has been relatively narrow, according to the National Association of Realtors (NAR).
Inman News reported that sales in July dropped by 13.2%.
The sales rate for of U.S. resale homes dropped 13.2 percent in July compared to the same month last year, and the national median price dropped 7.1 percent, the National Association of Realtors reported today.
So who's right? Both. The CEP News article is referring to seasonally adjusted data from the NAR. Seasonal adjustment is a statistical method for removing the seasonal effects on real estate sales. When data is seasonally adjusted we can compare June sales to July sales because the seasonal factors that would normally cause one month to have more sales than the other have been eliminated. The CEP News article is reporting that seasonally adjusted sales increased 3.2% from June to July.
The Inman News article is not using seasonally adjusted data which is why they are comparing sales in July 2008 to sales in July 2007. In this case sales actually fell 13.2% over last year.
I personally don't focus too much of my attention on seasonally adjusted data because the data is only going to be as good as the statistical algorithm used to seasonally adjust the data. By looking at actual sales figures I can ensure that nothing is getting lost in the seasonal adjustment.
In the case of July's sales in the US, I think the more important story of the two is that sales were down 13.2% over last year.