Home sales surge in third quarter, price decline slows
Filed under: Economy, People, Investing
Sales of existing homes continue to improve, increasing 11.4% to a seasonally adjusted annual rate of 5.30 million units in the third quarter, compared to 4.76 million units in the second quarter. Existing home sales, which include condos and single-family homes, are now 5.9% above the 5.01 million-unit pace in the third quarter of 2008, according to the National Association of Realtors (NAR).Sales increases were seen in 45 states and the District of Columbia, with 28 states experiencing double-digit gains. Lawrence Yun, NAR chief economist, said in a press release, "We can't underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector. It has 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."
House prices, however, didn't fare as well as house sales. During the third quarter, 123 out of 153 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the third quarter of 2008. Only 30 areas had price gains. The national median existing single-family price was $177,900, which is 11.2% below the third quarter of 2008.
Price Decline is Moderating
While we are still seeing some decline in prices, that decline is moderating. According to Yun, "a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market."
Yun does expect foreclosures to continue to come on the market, but thinks "rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures."
The biggest sales increase between the second and third quarters was in North Dakota, up 42.3%. Next to see huge gains was Rhode Island, which rose 26.5%. Pennsylvania sales increased 25.6%.
The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2% from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3% to $115,600, followed by Oklahoma City, at $144,100, up 9.1% from a year ago.
Biggest Sales Increase in Northeast
Regionally, existing home sales in the Northeast surged 16.7% in the third quarter, on pace for the sale of 930,000 units, which is up 6.9% over last year. The median existing single-family home price in the Northeast declined 9.4% to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8% from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6%; and the Pittsburgh area, where the median price rose 1.5% to $124,600.
In the Midwest, existing home sales jumped 13.2% in the third quarter, keeping on pace to sell 1.20 million units, which is up 5.2% from a year ago. The median existing single-family home price in the Midwest dropped 5.5% from the same quarter a year ago to $150,200.
In the South, existing home sales rose 11.3% in the third quarter to an annual rate of 1.97 million, which is 5.9% higher than the third quarter of 2008. The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9% from a year earlier.
Existing home sales in the West increased 5.6% in the third quarter to an annual rate of 1.19 million, which is 4.6% above a year ago. The median existing single-family home price in the West was $224,000 in the third quarter, down 16.4% from the third quarter of 2008.
Clearly the market appears to be turning around. While some question whether there is enough demand to keep up with the number of foreclosures expected to hit the market in the next year, reports seem to indicate the demand may finally be there. Hopefully Yun is right when he predicts that home prices will stabilize by next spring.
Lita Epstein has written more than 25 books, including The 250 Questions Everyone Should Ask About Buying Foreclosures.
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Reader Comments (Page 1 of 2)
11-10-2009 @ 1:33PM
tom said...
So the economy might be improving...except for the conservatives where it will be always doom and gloom. Obama has been accused of being a socialist, but he is about as close to being a capitalist as you will find...why else the corporate bail-outs? Perhaps many would have preferred he buy out their mortgages and home losses? Now that would be socialist.
GOP...you bet the farm on wars. You had no problem with a trillion dollars here and there as long as it was for the so-called good fight. This is over eight years. Now you complain about a trillion over ten years and for a program to ensure that health care is a right not a privilege. So you like death and destruction and cold-war mind-set over helping your fellow citizen???
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11-10-2009 @ 1:34PM
ben said...
Did they factor in how may foreclosures took place for the month. Heard that forclosures had hit the high end housing too. Bunch of liars. Nothing has improved. Revised your figures and be transparent to the american people who at this very moment are suffering big time because of lies and greed.
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11-10-2009 @ 1:35PM
john said...
Retarted commentator. People bought because of the expiring tax credit. Back that out of the numbers, if you can
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11-10-2009 @ 3:12PM
OU812? said...
Where YOU been, Tax credit has been expanded now and one must qualify for it, Bottom line is people are out spending the money and thats a good sign...Tax credit is only good for 1st time buyers. Lots of investors out there with cash as well. Money flowing is ALWAYS GOOD
11-10-2009 @ 1:35PM
jeff said...
What REAL ESTATE AGENT wrote this!! Most of the homes that are selling are foreclosures and at super cheap prices often with the bank who now owns them paying all closing costs including the downpayment!! DO NOT BUY A HOME AS AN INVESTMENT!! This is what caused the whole problem .. prices always drop in the winter months and then rise a little in the Spring and fall so this 3rd quarter is no big deal. Home sales are STILL WAY DOWN FROM 3 YEARS AGO... IMPROVING FROM ALMOST ZERO IS EASY!! REALIZE THAT THE STATISTICS WERE FROM THE National Association of Realtors WHO ARE MANIPULATING THEM TO TRY AND MAKE MONEY!!
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11-10-2009 @ 1:36PM
Mrs. Silencedogood said...
The economy will only improve as long as we are all on the same level playing field.
when national health care comes on board, every business will have to pay $3,500 per employee if they dont insure them.
what happens to the products we import. will the government put a tariff on the products coming in.
(.like the cars being made in china... or the chinese garlic that comes into the country or how about all the car parts made in south america or maybe we should buy tomato from mexico only--we have to compensate all migarant workers with health insurance)
to compensate for this new tax on america. or
should we just sit back and wait for all our manufacturing jobs to go overseas, down south or up north & trade our 60k-70k jobs in for min wage work ... say $7.25 an hour.
Mcdonalds and fast food resturants are still expanding...
but will have health insurance
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11-10-2009 @ 1:35PM
Jerry said...
An investigator from the US Attorney General's office was on c-span. He said he is working to collect the first time home credit money the IRS gave, in the form of a check, to people who hadn't even bought a house at the time they got the money. Over a billion dollars! He said many of the fraudsters were employees of the IRS. Another big waste of money. Clinton and his money advisors made it possible for a lot of people who lacked the ability to pay a mortgage, get a mortgage and a house. These are the "walk aways" the foreclosure kings and queens. What the hard working American got was reduced prperty values. Now Obama is re-setting the stage so another batch of people with no sustaining money can buy a house.
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11-10-2009 @ 1:41PM
ajgorm said...
Sell them a house ! once your property taxes go up annually and fees and city taxes and other things you will be asking for OUT ! 8000 bucks must come from someones TAXES. Plus loan modification costs where is the money going to come from to pay for all this stuff. shouldnt someone call the card company to tell them we are over the limit and close the account. Or do we just keep on spending like their is no tomorrow.
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11-10-2009 @ 1:53PM
jim said...
The writer of this article is a pipedreamer living in Obamaland..
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11-10-2009 @ 2:00PM
michael said...
The home prices are too high for the failing ecomony and hih unemployment if these homebuyers lose their jobs they risk going into foreclosure not enough jobs good jobs out there!
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11-10-2009 @ 1:56PM
TERRY said...
I hope for the next year things change for our kids sake and all the people out of work .
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11-10-2009 @ 2:00PM
Iridium said...
Of course sales are going up. The number of foreclosed properties being sold for pennies on the dollar has never been higher in history.
Foreign investors are taking advantage of the lowest value of the dollar in decades along with plummeting prices to snatch up property all over the US. They are then renting the property to people.
Someone from Russia bought almost an entire city block in Cleveland to turn into rentals. Yes, you now have slumlords from other countries hounding you for rent.
People that are actually trying to purchase foreclosed homes to live in are being outbid by wealthy investors buying homes with cash.
Because this business is so lucrative the US government is now getting in the game. It used to be just the welfare class that took government housing. Now it is going to be a good 25% of the middle class.
NONE OF THIS IS GOOD FOR AVERAGE AMERICANS!!!
It is all designed to force the middle class to take government handouts. To force socialism down our throats. Most people will not have a choice. The poverty level needs to be raised from $18k for a family of three to $48k.
With energy and food costs doubling over the past 3 years along with increased taxation it is nearly impossible for a family to live comfortably making close to $50,000 a year.
In fact you are better off taking a pay cut to get under $35,000. At that level you are eligible for heating subsidies, partial food stamps, and subsidized baby food. You might also be able to get a 2% interest federal home loan modification. Go above $35k and you get nothing.
Again the entire financial debacle was designed to enrich the top 1% and break the backs of the rest. To forever return the world to the state of the peasant and the noble.
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11-10-2009 @ 2:04PM
boxertwin said...
There ya go, Obama. Entice people who cant afford a home to buy one again. Start the chain reaction all over and set us up for a second crash. What makes you think this program is ultimately any different than Clinton's sub prime mess?
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11-10-2009 @ 2:17PM
Donovansdanes said...
I just returned from vacation in Florida. While driving from the Keys to Lauderdale, I noticed several BRAND NEW housing subdivisions that have halted ALL building. Yes the block frame work for all the condos and Town Homes are in place. However, no construction at all on the lots for the single family home dwellings. These new home builders even had huge signs/bill boards erected, that stated up to 40% off the original price. Yet here it is a year later. And still NO sales, just concrete block and empty lots. So, I'd like to know where these home sales boom figures are coming from. Its sure not for NEW CONSTRUCTION. So, its gotta be foreclosure sales, that in fact are comprising the NAR's sales figures. With home values the way they are right now. One would actually end up losing money, building a brand new home.
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11-10-2009 @ 2:27PM
ajgorm said...
Location Location Location..Urban sites close to big cities where JOBS and amenities are a short drive away from high paying jobs. If and only if we get jobs back with inflation (short term 10 years at most) since we know our true fate it will be away from border towns you would like to be living out where they support your second amendment rights. Maybe the upper thirteen states. We can secure the inner states and advance brown shirt American agendas with stick attacks on our hijacked government in their coastal rat races.
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11-10-2009 @ 2:38PM
jackson235xxx said...
Home sales surge in third quarter, price decline slows"====Must be Obama's fault.
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11-10-2009 @ 2:55PM
dan said...
In Germany they decided to bailout the worker/consumer and were faced with the same problems as we are, maybe worse. So they paid the companies to keep workers at their jobs and not lay off. Perhaps they figured out that capitalism doesn't work if the consumer makes up 70% of the economy and stops spending. We bailed out the people who created the derivatives and bad loans and now face a consumerless/jobless recovery. Who's the socialist in this case?
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11-10-2009 @ 3:02PM
Bob said...
As you watch your equity disappear, blame the democrats and the Community Reinvestment Act, circa 1977 and 1994, both under democrat administrations. They forced banks to make loans to unqualified lenders and the consequences are being paid by all homewoners. By the way, Obama perpetuated the process and is as bad as Barney Frank and Charles Schumer, advocates of the bill. Chris Dodd got a sweetheart loan under the program from City Bank who eventually got bailed out by Obama. What a bunch of bums!
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11-10-2009 @ 3:45PM
wayne said...
I live in the MidWest and housing, road construction, and employment ads are moving in the right direction.
One can't drive on a major highway for over 50 miles without running into construction.
The ads for Service Level people are going unfilled. Dubuque Iowa has a housing shortage.
The work will not come to you, you need to move to where the work can be found. I moved to different cities/states seven times and bought homes in each of the new locations by the time I was 40.
There is always work for those that are hungry enough to go after it.
11-10-2009 @ 3:41PM
alexanna said...
Obama is making bad things worse. First the bogus
health care bill which does not address cost containment
but taxes and taxes the American public and makes it
apparent that the government would like seniors to die
earlier-reducing benefits and raising premiums on some
of the vulnerable people in our country. However, the
expansion of medicaid makes it easier to have the
rest of eastern europe and South America bring their
entire villages to our country. This is why there are no
jobs!
We are in a second housing bubble with our stupid government giveaways. A s soon as these people
have a financial difficulty they will also go into fore-
closure. These housing values are still too high.
The IRS stole $8000 checks? I was not aware of this
but wouldn't be surprised. Also, beware of bogus
schools who just take your money and when you
graduate there are no jobs!
Obama is creating his own vietnam in Afganistan while
our country is sinking fast. He should be attending to the
American people's need for jobs and universal health
insurance which means no more money for campaigns
for politicians! AARP is a real piece of crap who is
a puppet of congress-never trust them!
This focus on war and house sales is illogical and
the "peasants" will pay again. I hate to say this but
our government is in a conspiracy to destroy the
middle class. At least this is how it appears. Vote
against Obama and his traveling circus in 2010 and
2012. They smell like dead fish.
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