Home Sales Collapse and Bear Stearns

The home sales slump will hit other financial instruments, as we see in the Bear Stearns Hedge Fund collapse. Home sales (existing homes) are lowest in four years.

June 25--U.S. Sales of existing homes fell in May to the lowest level in four years, while the median home price dropped for a record 10th consecutive month. The National Association of
Realtors reported June 25 that sales of existing single-family homes and condominiums dropped by 0.3% to 5.99 million units in May, the slowest pace of sales since June 2003.

The median price of a home sold last month dropped to $223,700, down 2.1% from a year ago. This marked the 10th straight price decline compared with a year ago, the longest
stretch of weakness on record. The sales declines were heaviest in the South, where sales dropped by 3.4%, and the West, where sales were down by 0.8%.

The inventory of unsold homes rose by 5% to 4.43 million units in May, a level that would take 8.9 months to clear out at the May sales pace. That is the highest inventory level since
the last deep slump in housing in 1992.

Note, the crash is slowest hitting New York City and other metropolitan areas on the Northeast coast.