According to the National Association of Realtors, the number of home sold fell 2.2% in October from September and fell 25.9% from September 2009. Although median home prices remained level from September 2009, roughly a third of all sales were distressed homes. The U.S. Commerce Department reports that new home sales dropped 8.1% from September and nearly 30% from September 2009.
New home sales are down 80% from its peak in July 2005, making it the lowest reported sales month since the government began tracking in 1963.
According to CoreLogic, shadow inventory rose 10% over the past 12 months leaving an eight month supply. At the current rate of home sales, reported shadow inventory plus visible inventory, it would take nearly two years to sell it all.
Texas has the lowest ratio of distressed properties to sales while Michigan, Florida and California have the highest.
Given the bad news for the real estate sector, economists don’t agree on when a recovery will arise (although certain Associations are proclaiming the recovery already began).
As the entire team at AG has been screaming for years, there will be no real estate recovery without an employment recovery. Retailers will enjoy great sales today on Black Friday, but in real estate, we need our own Black Friday which will only come in the form of dramatically improved employment stats so that not only are people employed at 2005 levels but are no longer underemployed and hanging on by a thread.
Missy Caulk
November 26, 2010 at 4:35 pm
Aren’t we? Haven’t we? Been having one?
We have in Mi.
Brent Mitchell
November 26, 2010 at 8:10 pm
The tax credit gave the real estate industry its mini Black Friday. Now, if we can just get the same momentum behind these amazing interest rates, we can see some positive growth towards a permanent recovery.
Lani Rosales
November 26, 2010 at 9:39 pm
Brent, I would argue as the column above states that interest rates and loan packages can be as sexy as possible and Uncle Sam can throw any incentive possible but if people are underemployed or unemployed and can’t pay their light bill, homeownership is not realistic. Employment has to perform better or the real estate sector is in trouble indefinitely, in my opinion.
Matt Stigliano
November 27, 2010 at 11:15 am
Brent – The interest rates may be great, but until more people can be approved and make it to the closing table, they can be 0% and still have no real impact. I don’t advocate wholesale approval of anyone and everyone, but some of the people I’ve seen turned down by banks or had difficulty getting a loan shouldn’t have been put through the ringer or been denied (in my opinion). Until banks begin lending at a stronger pace, the interest rate talk is lost on a lot of people.
The pendulum swung too far when the realization that the “we’ll give money to anyone” attitude of the housing boom wasn’t working out so well. Much like everything, we often over correct for the mistakes of the past.
Brent Mitchell
November 26, 2010 at 9:51 pm
Lani,
That is true, but look at the rush of sales by qualified buyers that hit because of the tax credit. They’re out there, it just seems like they need an incentive to pull the trigger. Black Friday isn’t exactly a huge, huge savings day on all levels; there are good deals, but there are plenty of full price items right next to the sale items. It’s all in the presentation…