by Calculated Risk on 10/24/2008 11:11:00 AM

Here is another way to look at existing homes sales - Not Seasonally Adjusted:

Click on graph for larger image in new window.

This graph shows Not Seasonally Adjusted (NSA) existing home sales for 2005 through 2008. Sales were higher in September 2008 than in September 2007 - the first time the year-over-year sales have increased since November 2005.

However sales in September 2007 were impacted by the credit crisis that started in August 2007. The current wave of the credit crisis will probably impact sales reported in October and November (existing homes sales are reported at the close of escrow).

There have been 3.82 million sales so far in 2008, and sales are currently on pace for about 4.9 million total this year - the lowest annual sales since 1997.

The second graph shows inventory by month starting in 2002.

Inventory levels were flat for years (during the bubble), but started increasing at the end of 2005.

Inventory levels increased sharply in 2006 and 2007, but have only increased slightly in 2008. In fact inventory for August and September 2008 are slightly below the levels of last year. This might indicate that inventory levels are close to the peak for this cycle (and have peaked for 2008), however there is probably a substantial shadow inventory – homeowners wanting to sell, but waiting for a better market - so existing home inventory levels will probably stay elevated for some time.