States See Surging Sales, Moderating Prices
Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest survey by the NATIONAL ASSOCIATION OF REALTORS®.
Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rate of 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the 5.01 million-unit pace in the third quarter of 2008.
Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.
Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”
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Turning Point?
Well, the NAR Midyear meetings have just ended. I had many opportunities to meet and speak with REALTORS® from around the country (and the world, for that matter). As always, I learned a lot from my conversations. But of course almost all of them posed the same question: are we on our way to a recovery? It is difficult to say for sure, but I do want to point out some of the latest developments in our economy and housing.
Let’s get the bad news out of the way first. The worst part about the current recession is the job market. The economy has shed nearly six million jobs since the start of the recession in 2008. Unemployment is at its highest level since the 1980s, and is likely to increase into double-digits before the end of this year.
Home sales are still down from year-ago levels. Existing home sales fell in March, as did new home sales. Inventory is still high – in March the number of existing homes available for sale was at a 9.8 months supply. Distressed sales (foreclosures and short sales) are accounting for almost half of all resales. In order for the market to fully recover, that share of distressed sales needs to shrink significantly. Prices are still declining, at least on a year over year basis. More Details..