Monday, November 23, 2009

October Existing Homes Sales Jump Record 10.1%

Existing home sales in October jumped a record 10.1 percent, according to data released moments ago, thanks to buyers rushing in to take advantage of the first-time home buyers' credit before it was set to expire.
Sales are up 23.5 percent since their lows in October 2008, which also is a record for year-over-year jump, according to the National Association of Realtors.
It's not clear the surge represents a bottoming out of the housing market, as the sales are still not happening organically--that is to say, without a government incentive. And now that the home buyers' credit has been extended to April, we won't know if we have an organic, non-subsidized bottom until after then.
The median sales price of an existing home in October was $173,100, down 7.1 percent from October 2008. That's the smallest decline in median home price in more than a year.
How October existing home sales broke down by region of the country:
Northeast: up 11.6 percent.
Midwest: up 14.4 percent.
South: up 12.7 percent.
West: up 1.6 percent.
Why is the number up so little in the West? Remember, the biggest foreclosure home states -- that is to say, the ones that were overbuilt the most during the housing bubble -- were California, Nevada and Arizona.
Existing home inventories are down to a seven-month supply. A healthy housing market is generally regarded to have a six-month inventory of unsold homes.
And let's be clear about this: sales of distressed homes accounted for between 33 and 40 percent of all existing home sales in October, according to the data, so that shows investors are still bottom-feeding off people who've lost their homes. On the other hand, some of those people who lost their homes got mortgages they could not afford and never should have stopped being renters, so that's a necessary adjustment on the system.
On the upside, for the first time in more than a year, we're starting to see some movement in sales of more expensive homes, not just bargain-basement ones that are in foreclosure.
The October figures show some uptick in sales of homes in the $250,000 to $500,000 price range, but nothing yet in the $750,000 and up range.

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