Home Resales Rose
American home resales rose in September more than forecasted- according to NAR, purchases of existing homes jumped 5.5 percent last month to a 5.18 million annual pace, the highest level in the last 12 months while the median national price dropped 9 percent.
Sales rose 1.4 percent compared with a year earlier, the first year-over-year increase since November 2005. Resales totaled 5.65 million in 2007.
Today’s figures compare with the 4.86 million level reached in June, the lowest in a decade and 33 percent down from the record reached in September 2005.
Foreclosures account for 35 to 40 percent of last month’s sales and according to Lawrence Yun, roughly 80% were primary residences, higher than the average 75% signaling that investors are NOT the primary reason for the jump.
Improved Sales- Temporary?
With the economy in an unpredictable state, I’m sure we’ll see many more reports of exceeding or declining from forecasted numbers but meeting numbers won’t likely make news.
Sales are doing better nationally but is that temporary? Is credit STILL tightening? Are banks nervous that foreclosures will depress values? Will they withhold financing because of their concerns making lower prices short lived?
“In terms of sales, I think we have bottomed out,” Yun said in a press conference. “The first step to housing-market stabilization is rising home sales. Hopefully, this trend can continue.” Yun also said, “inventories need to continue dropping in order to stabilize prices, and that will take more time.”
New Home Construction
But what about new homes? New home construction accounts for 10% of national home sales and many builders are reporting lower than expected sales for the month while others are putting entire projects on hold.
“The housing downswing is really not exactly even nearing a bottom at this point,” David Seiders, chief economist at the National Association of Homebuilders said. “The core problem in the economy is still housing, and house prices are decimating the financial markets.”
What About YOUR Market?
Most of these numbers are absolutely NOT a depiction of Austin, are they close to the mark where you practice real estate? What are things like where you are?
sources: businessweek.com, NAR
photo source: flickr
Pam Buda
October 24, 2008 at 12:48 pm
Hi Lani–our area (Sonoma County in Northern California) has seen an exaggerated version of the National Trend, with pending sales sharply up beginning in February and rising consistently since then–with the highest sales rate in well over 24 months beginning this summer and continuing through September.
Median prices are down dramatically at the same time, fueling a strong buying spree in our entry level market (under $500K or really under 400K) with both first time buyers and investors participating. The rate of sales is accelerating and the number of new listings at the low end are declining.
Prices at this end of the market are in the same range as 2002-2003 in some cases. Some lenders estimate that locally in September we have worked through about half the sub-prime loan inventory. That remains to be seen.
Sonoma County is a highly desirable area about 1 hour north of San Francisco with relatively strong employment and a diverse economy. Many Bay Area residents move here for more affordable housing or to retire for a taste of the wine country lifestyle. As such, we more closely mirror real estate trends in the prime Bay Area markets such as SF, Marin County, the peninsula and the East Bay. At the same time, our upper level market which has maintained some strength, appears to be slowing due to the increased difficulty and cost of jumbo loans.
Teresa Boardman
October 24, 2008 at 3:15 pm
Home sales went up here in Ramsey county MN too. We seem to be have a clearance sale with a lot of the bank owned and now steeply discounted homes being purchased. There are incredible bargains out there but some buyers still think homes are like stock and they are afraid to buy if there is any chance they will go down. As the bottom gets sold off the total inventory is going down. I predict in a few months the market will be more balanced and prices will be stable. I hate to ring the bell but I am inclined to think we have hit bottom here. Housing is not a stand alone thing and is affected by the rest of the economy. We are in a nation wide ressecion so I guess it will all depends upon how long it lasts and how deep it goes.
Tom Vanderwell
October 24, 2008 at 4:24 pm
I’m in West Michigan and I need to throw some stats in the other side of the spectrum.
Currently 57% of sales are RE0 or short sales. The inventory levels have averaged 14 months. The $275k to 350k market (bread and butter homes for established families) in part of our market (Ottawa County) has a 3.2 year inventory. Vacant lots for sale are running about a 13 year inventory.
It’s all about jobs and we are still losing them.
Sorry, but in Michigan, the bottom isn’t even close.
Tom
Thomas Johnson
October 24, 2008 at 4:37 pm
These numbers are encouraging. Even though most would say the prices are no good, but until we get the banks out of the flip this house business, normal sellers will be under oversupply price pressure. At least the lenders are finally starting to liquidate their holdings, and are finally putting more short sale staff online.
Tim McDonald
October 24, 2008 at 5:53 pm
According to Illinois Association of Realtors, September saw home sales in the Chicago area drop 6.2% compared to September 2007. Prices were down 13% to $224,000 from September 2007. In the city of Chicago, things were worse as the drop in home sales was 16%. From what I’ve read, the city still has not seen a decline in the inventory of condos, with many projects still not finished that are currently under construction. I feel prices have not seen the bottom yet, but don’t foresee them getting too much lower. Some of the more depressed areas (even before the crash) are offering great first time home buyer incentives, but the restrictions and media make it seem very difficult to obtain a mortgage.
Missy Caulk
October 24, 2008 at 8:02 pm
Lani, in Ann Arbor our home sales were up over 2007, but prices were done. Over half of our sales were short sales or foreclosures. Our inventory is decreasing so that is the good news.
But, my gut tells me until the foreclosure’s slow we will continue to drop in sales prices. WE need jobs in Michigan before we recover.
Steve Simon
October 25, 2008 at 3:18 pm
West Central Florida has been absolutely killed…
The numbers (stats) do not sufficiently tell the tale of woe that has been the norm here for quite a while.
Foreclosures are backed up in the hopper so far that the additions to inventory is assured well into the latter half of next year.
The discretionary income that does not exist elsewhere can almost guarantee us a poor Tourist Season. The only good things are that the slow down has thinned out the ranks of the industry, and gas is still dropping…
We will survive read my post:
https://www.stevesimon.us/blog/?p=333
But it will be slow going for a good while.
Just my thoughts:)
Paula Henry
October 25, 2008 at 7:35 pm
Lani – Our sales were up and prices down. There is a lot of investor interest buying up bank owned, which is great for the resale market homeowners.
It will be interesting to see how the rest of the year plays out and what Spring brings. I believe we are at the bottom, but we never had the huge icreases much of the country did and besides, we have the most affordable homes in the nation vs. our income; about 21% of our income goes toward housing – pretty amazing!