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Are Home Sales Finally Starting to Rise?

January 3rd, 2008 12:55 AM

Are Home Sales Finally Starting to Rise?

The National Association of Realtors reported that sales of existing SFR, townhomes, and condos rose by 0.4 percent in November from October of the same year. This increase is welcome news but should also be taken with a grain of salt. The increase in existing sales came on the heels of a record low October and does not signal a shift in the real estate market necessarily. Rather, it seems as though it may be merely an isolated case in which buyers took advantage of the drop in interest rates during the month of November and perhaps were eager to finish their 'business' before the end of the 2007 calendar year.

Hisham Labanieh

First Choice Appraisals

Complete Article Below...

Existing-home sales rise modestly in November

By Rex Nutting, MarketWatch

Last update: 11:36 a.m. EST Dec. 31, 2007

WASHINGTON (MarketWatch) -- In a hint of stability, sales of U.S. existing homes rose 0.4% in November to a seasonally adjusted annualized rate of 5 million, the National Association of Realtors reported Monday.

Sales of existing homes have been close to a 5 million annualized pace for three straight months, in contrast to sales of new homes, which have continued to plunge in recent months.

Sales of existing homes are down 20% in the past year and are down 31% from a peak of 7.21 million two years ago.

Despite the encouraging news on November sales, "it is still too soon to talk about stabilization in the housing market," said John Ryding, chief economist for Bear Stearns. "This is not the bottom yet," said Harm Bandholz, chief economist for UniCredit Markets.

Including both new and existing homes, total sales of single-family homes fell 0.7% in November to a seasonally adjusted annual rate of 5.05 million, the lowest in 10 years.

Inventories of unsold homes on the market declined by 3.6%, representing a 10.3-month supply at the current sales pace, compared with 10.7 months in October. Inventories typically drop in the autumn.

"Inventories of unsold homes remain a concern," Bandholz said. "It will take time and lower house prices to get rid of these inventories."

The median sales price fell 3.3% from a year ago to $210,200.

November sales were in line with the 4.99 million annual pace expected by economists surveyed by MarketWatch.

Sales jumped 10.3% in the West region, reversing part of the 22% drop between July and October. Sales were unchanged in the Midwest. Sales fell 2% in the South and fell 3.3% in the Northeast.

Sales of single-family homes rose 0.7% to a seasonally adjusted annual rate of 4.40 million. Condominium-unit and co-op sales fell 1.6% to a 600,000 annualized pace. Condo sales are the lowest since November 2001.

Inventories of single-family homes declined to a 9.9-month supply from 10.4 months in October.

The federal government should take two bold steps to rescue the housing market, said Lawrence Yun, chief economist for the real estate trade group:

The government should allow Fannie Mae and Freddie Mac to purchase larger loans.
The Federal Reserve should lower interest rates by at least three-quarters of a percentage point.

Posted by Hisham Labanieh on January 3rd, 2008 12:55 AMPost a Comment (0)

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