The latest existing home sales figures hit the tape today. Here’s what they showed:
* Existing home sales jumped 7.4% to a seasonally adjusted annual rate of 6.54 million in November. That was up from 6.09 million a month earlier and well above forecasts for a reading of 6.25 million.
* Regionally, sales were strong across the board. They rose 4.8% in the South, 6.6% in the Northeast, 8.4% in the Midwest, and 10.6% in the West. By property type, single family sales surged 8.5%, while condo and coop sales were flat on the month.
* The raw number of homes for sale slipped to 3.518 million from 3.565 million in October. That was down 15.5% from a year earlier. The months supply at current sales pace indicator of inventory dropped to 6.5 from 7. That’s the lowest since December 2006. Median prices were roughly unchanged — $172,600 in November vs. $172,200 in October. That was a decline of 4.3% from a year earlier.
Santa delivered more good news for the housing market today. November home sales easily topped estimates, with strength evident in all regions of the country. Moreover, the inventory of homes for sale continues to dwindle. That shows that distressed properties are being snapped up by investors and single-family buyers, an encouraging sign.
In the big picture, I’ve been saying for a long time that falling home prices would eventually “fix” the housing crisis. We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income. That has now happened, and you’re seeing buyers come out of the woodwork as a result. The home buyer tax credit and the Fed’s meddling in the mortgage market are also helping the process along.
In short, my call in the spring that the housing market was bottoming out appears right on target. We have since seen sales rise, inventories decline, and construction activity stabilize. Look for pricing to follow later in 2010.
{ 3 comments… read them below or add one }
How are prices going to rise with incomes stagnant, unemployment to remain (U6#) in the mid to upper teens, higher taxes from state, city and fed gov’ts (income taxes, property taxes, sales tax,etc,etc,etc.) coming across the board and higher interest rates? 1+1+1+1=4 circumstances to put further pressure on the consumer and borrower.I appraise r.e estate in Manhattan and have been seeing after the seasonal period pass further pressure on value from the high end all the way to the low end. I respectively disagree with your premise. Your past results do not guarantee future results. Case in point, the 80’s r.e bubble burst was over a decade of a stagnant r.e market till 2003 when the bubble really begun to inflate. This bubble burst makes the 80’s bust look like nothing.
If the housing market is recovering, how does the upcoming mortgage renewal applications in late 2011 to 2013 going to affect this recovery? I recall a chart from Weiss Research showing the mortgage renewal volume some time ago. Could you please put this chart up again? Also, I live in Canada (Vancouver) and I’d like to see similar metropolitan area data across the border but data hasn’t been easy to come by…
Welcome back Mike. I was in Greece and Italy recently and know what you are talking about. I am a real estate appraiser for over 20 years. It all boils down to 3 things….jobs, jobs and jobs. No work..no income…no taxes. I am over 65 and still working. I saw this problem coming fast and furious over 6 years ago.
Can’t outsource manufacturing jobs, let illegal immigration run over board and elect people you are out of touch with their back bones to run the country..then expect prosperity. You said it very well.. the Brits dusted themselves off from the rubble and picked themselves up to go to work. W E H A V E N O W O R K T O G O TO
Iceland has defaulted, Spain,Portugal,Greece and others are close…we are in serious trouble as a nation. I see it every day…10 years of home equity has vanished
if you have a mortgage you are in trouble…your biggest life investment ( your home) has lost 10 years of equity…..pure theft on the gov’t part…..but your taxes have gone up…..why buy?