Posted on Wednesday, December 1, 2010
In September, when existing home sales rose 10 percent, the National Association of Realtors (NAR) released a statement announcing the numbers meant a sales recovery had begun.
One short month later, and after only two months of gains, sales have slumped 2.2 percent to a 4.43 million annual rate, which was even lower than economists had predicted. This number was down 25.9 percent from October 2009. Also down was the median price of existing homes sold, which came in at $170,500.
September’s annual rate was 4.53 million.
“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,” said Lawrence Yun, NAR chief economist. “Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels.”
He continued, “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.”
Existing home sales are measured using reports of completed transactions that include single-family, townhomes, condominiums, and co-ops.
A different NAR survey revealed 10 percent of Realtors said they had a contract canceled as a result of a low appraisal in October. 13 percent said they had a contract delayed and 16 percent said a contract was negotiated to a lower sales price in the past month.
Paul Dales, an economist with Capital Economics, predicted in September that another slump was coming, and agrees that the foreclosure freeze may have contributed to October’s decline in sales.
Now that most foreclosures have resumed, he says, sales may turn around in November.
“Nevertheless,” he says, “high unemployment, widespread negative equity, tight credit conditions and a decline in the desire to own a home will keep the housing market weak for years.”
He also added that Capital Economists believes home prices will continue to decline for at least another year.
Total housing inventory at the end of October landed at 3.4 percent, representing 3.86 million existing homes available for sale. This equates a 10.5-month supply at the current sales pace. This is down from September’s 10.6-month supply.
By: Joy Leopold DSNews.com