While the market has been struggling all year it is now reflected in mainstream market sentiment. This is due to price drops showing up, terrible year over year sales comparisons and high inventory.
Sales fell as expected in July and remain close to the "Scorched Earth" benchmark. A rate similar to the worst six months of the financial crisis.
Listings fell dramatically in July and are now down 8% YOY.
The sales to new listings ratio recovered somewhat with the large drop in new listings. Unless sales rate improves the reduced number of new listings will only slow down the pace of price decreases as the ratio remains below 50%.
Raw data from Bob Truman's Old Criteria page.
Initial explanation of seasonally adjusted data and benchmarks and seasonally adjusted sales to new listing ratio.