November 28 2010 (Shirley Allen)
Despite record low mortgage rates, existing home sales declined 2.2 percent in October compared to September. The sales decline came on the heels of two consecutive strong monthly gains. Existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops fell to a seasonally adjusted annual rate of 4.43 million units.
According to the report released by the National Association of Realtors (NAR), there have been 4.149 million existing home sales year-to-date, down 2.9 percent from the 4.272 million homes sales at this same time in 2009.
In October of 2009, sales surged to a rate of 5.98 million units due to the approaching deadline of the initial first time buyer tax credit.
Lawrence Yun, NAR chief economist, said that we should expect recent sales pattern to continue. In the report he states, “The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels. Based on current and improving job market conditions, and from attractive affordability conditions, sales should steadily improve to healthier levels of above 5 million by spring of next year.”
The national median existing-home price for all housing types was $170,500 in October, down 0.9 percent from October 2009. Distressed homes accounted for 34 percent of sales in October, compared with 35 percent in September and 30 percent of sales in October 2009.
NAR President Ron Phipps attributes the impact of the foreclosure process, an overly tight credit market, and a notable share of appraisals coming in below prices negotiated etween buyers and sellers.
A NAR survey showed that 10 percent of Realtors in October reported that they had a contract cancelled as a result of a low appraisal, 13 percent reported they had a contract delayed, and 16 percent said a contract had to be renegotiated to a lower sales price as a result of a low appraisal.
Total housing inventory at the end of October fell 3.4 percent to 3.86 million existing homes available for sale, which represents a 10.5-month supply at the current sales pace, down from a 10.6-month supply in September (not accounting for the “shadow” inventory).
First-time home buyers purchased 32 percent of homes in October, unchanged from September, but down from 50 percent a year ago during the initial surge for the first-time buyer tax credit.
Single-family home sales declined 2.0 percent to a seasonally adjusted annual rate of 3.89 million in October from 3.97 million in September. The median price for a single-family home was $171,100
Existing condominium and co-op sales fell 3.6 percent to a seasonally adjusted annual rate of 540,000 in October. The median price for an existing condo was $166,000.
Tags: NAR, housing inventory, single-family homes, median price, existing home sales, low interest rates, median home price, condominiums, co-ops, housing market