November Home Sales Take Small Step Forward

The U.S. housing sector continued to struggle in November, as existing-home sales rose a less-than-expected 5.6% last month to a seasonally adjusted, annualized rate of 4.68 million units, the National Association of Realtors announced Wednesday.

A Bloomberg survey had expected November existing-home sales to reach an annual rate of 4.75 million units. Existing home sales were at rates of 4.53 million and 4.12 million in September and August, respectively.

Further, sales are down 27.9% from a year ago in November 2009 -- worse than the 25.9% year-over-year decline registered in October 2009.

Two Bright Spots


There were, however, two modest bright spots in the November report. First, home inventories fell 4.0% to 3.71 million units, or a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October. A healthy resale market has a three- to five-month supply of homes. Also, the 3.71-million-unit inventory is slightly less than double the 30-year average of about 2.0-million-units.

A return of inventories to normal levels is important because it's one key to stabilizing home prices, and the resumption of healthy home value appreciation rates of 4% to 7% per year.

The second bright spot: Existing home sales rose in every U.S. region. Sales increased 2.7% in the Northeast, 6.4% in the Midwest, 2.9% in the South, and 11.7% in the West.

NAR Expects Housing Recovery to Continue in 2011

NAR Chief Economist Lawrence Yun said even though sales increases this autumn have been slightly disappointing, he's emphasizing the impact of likely stronger job growth in 2011.

"Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," Yun said, in a statement. "The relationship recently between mortgage interest rates, home prices, and family income has been the most favorable on record for buying a home since we started measuring in 1970, Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011."

The median sales price for a single-family home was $171,300 in November, up 1.2% from a year ago, and better than the 0.9% year-over-year dip recorded in October.

The median sales price for a condominium was $165,300 in November, down 5.5% from a year ago, and worse than the 4.2% year-over-year decline recorded in October.

The median sales prices for all types of housing in November, by region, were as follows: Northeast, $242,500, up 9.2% from a year ago; Midwest, $138,900, down 1.1%; South, $148,000, down 2.6%; and the West, $212,500, up 0.4%.

Economists and market analysts closely follow the monthly existing-home sales statistic because previously owned homes account for the bulk of U.S. home sales. Moreover, the U.S. housing sector does not operate in a vacuum. When homes are sold, homeowners tend to buy durable goods and big ticket items for the new home: furniture, appliances, landscaping equipment and home care supplies, etc. -- an uptrend in each of which is good news for the economy and bullish for U.S. stock markets.

Existing Home Sales: Key to Housing Sector Recovery

November's existing-home sales report was only a small step forward. Sales did rise in November, but economists and investors were looking for a larger increase.

Further, investors should keep in mind that existing-home sales will shoulder a greater portion of the "GDP growth burden" regarding the housing sector. The reason? New home sales are at or near all-time lows, as builders are reluctant to add to supply amid horrible new home sales demand. Existing home sales will have to increase substantially for the housing sector to contribute significantly to U.S. GDP growth in 2011.

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stoli100

this guy should be forced to wear a cheerleader outfit with a big 'O' for Obama and wave pom-poms. He conveniently fails to mention that most banks have stopped (temporarily) foreclosures. Once they get their act together comes the flood of foreclosed properties. People aren't going to magically make their house payments after a one year stopage.

December 23 2010 at 10:47 AM Report abuse rate up rate down Reply
libluvcheeselogs

Wait till all the repos come out next month lol

December 23 2010 at 6:11 AM Report abuse rate up rate down Reply
BABIN

While small group of legally and without anyone control appropriates much of the generated value and your profits, bonuses and premiums paid by workers, students and other taxpayers should not be excluded that the current crisis turns into social unrest and political violence without precedent accompanied by class hatred. Marx was right. Capitalism is bright, planetary and suicide and this is going from 1960-is until now-----

December 23 2010 at 3:01 AM Report abuse -2 rate up rate down Reply
ajallenky

Face reality !! The jobs lost in the past few years will NEVER come back - 50% of thses jobs were in the over inflated construction industry and the other 50% went to China and India, both of which pay 1/10 of the wages demanded by U.S. workers - also, these workforces are VERY hungry for ANY type of job to improve their standard of living. They are very trainable, educated, and eager to work at ANYTHING - kind of like the U.S. labor force around 1900 when our industrial revolution. I don't like this either, but one cannot dispute the facts and the reality of this situation. Politicians will NEVER admit this cause they would NOT get re-elected - but, ask the business owners who have elected to move operations to foreign countries and there answer will be WAGES !!!!

December 23 2010 at 2:50 AM Report abuse +3 rate up rate down Reply
Paul

Are you kidding me!!!! The real truth ia that this sunshine pump rationalization does not even pass the laugh test. The real problem is the loss of jobs over the last 15 years in the US where people can make more than $12.00 per hour!!! Part of which are skilled fabrication and manufacturing jobs. Think about it for a moment, even when two people in a household are working today at $12.00 per hour jobs the basic gross pay total for both is approximately $48000.00 annually ($12.00/Hr. X ~4000 Hrs. annually). DO THE MATH and you find that home ownership is economically out of reach at today's real estate market values no matter what the politicians and the NAR spin out to the public. If this is not the case then why is it that banks are not lending? I submit that banks are in business to make money therefore, by enlarge, they will in fact lend providing that the applicant income stream is there to support the mortgage obligation.
The following is quoted from a recent article by Bruce Watson entitled "Disturbing Statistics on the Decline of America's Middle Class". "The middle class have really become second class citizens. The answer is complicated, involving factors like the rising cost of education, the loss of pension funds and affordable health care, falling middle class wages, and the skyrocketing price of housing. Yet one clear answer lies in manufacturing. When looking at the declining American middle class, a good number to start with is 42,400. That's the total number of factories that the U.S. lost between 2001 and the end of 2009. Put another way, this translates into the outsourcing of 32% of all manufacturing jobs in America. This bleeding of American manufacturing represents a massive drop in the products that are made in America. According to one economist, this country currently doesn't produce any television sets. Computer manufacturing in the U.S. currently employs about 166,000 people; in 1975, it employed almost 300,000”, and that was long before computers were a household and personal staple..
The trickle down effect of one manufacturing job creates at least five additional jobs within the economy, some of which are additional manufacturing jobs along with service jobs. Do not forget that service type jobs for the most part, are inherently not job creators but exist by feeding off of manufacturing type jobs or off of each other or by some form of government subsidy.
Do not be mislead because it is not rocket science. We have now forced lending institutions, and rightfully so, to tighten up the mortgage qualification criteria like maybe having to show an income stream to be able to actually pay back a mortgage obligation, which has been somewhat of a novel idea in the past fifteen years The true reality is that the absence of any meaningful rebound in the bad residential housing market nationwide is a problem that is the direct result of the lack of jobs that pay enough money to qualify current mortgage applicants.
Our government (both political parties) are responsible for this current sad state of our American way of life. All they are doing now is making sure that the "sunshine pump" is constantly spewing out half truths or misleading information at best and blaming each other while the situation only gets worse. There is no question that residential real estate values will continue to fall in most areas of the country until the demand once again drives the market, and that will only be achieved and sustained through decent paying skilled jobs. We need to get back to engineering and manufacturing here because that is a major part what creates these decent paying jobs that can in fact support a mortgage. The problem will begin to be corrected only when both Federal and State governments enact legislation that again makes it friendly to American companies, both small and large, to create jobs here on American soil, and not to reward them for outsourcing off shore while ultimately creating more foreign competition. Make no mistake about it, the lack of decent salaries and wages for the middle class is what is driving the housing market down, demand will not return without jobs that create other jobs. This is the key to our recovery so be careful of the spin that is out there!!!

December 22 2010 at 11:54 PM Report abuse +5 rate up rate down Reply
1 reply to Paul's comment
hi cat

"They" are attacking teachers and other public pensions as "outrageous" and I hear the media pumping up this issue. Is that to make the ex steel workers and others retirees who had their pensions looted by Gecko types feel redeemed? That they have a real friend at the talk radio station? The corporate masters use words like "unfair", "lopsided" when they compare public pensions to whatever private pensions the corporate criminals have not YET raided and decimated. And just AREN'T AS GOOD. They "Rush" to judgment and are quick to call unions as promoters of class warfare, ... them and us ... The corporates prefer the FOREIGN slave labor rates they can get overseas to letting Americans earn a decent wage. They are actually serious and believe the rest of us swallow their muck and they have the HIGH MORAL ground in their class warfare argument they foment here in our homeland.

December 23 2010 at 4:44 PM Report abuse rate up rate down Reply
benjb00

Yeah on foreclosed houses!!!

December 22 2010 at 8:39 PM Report abuse rate up rate down Reply
kawieboy

It took the media nearly 3 years to get this recession going strong...it will take at least that long for us to get out of it.

December 22 2010 at 6:35 PM Report abuse +6 rate up rate down Reply
ajgorm

Sales are down 27.9% from a year ago in November 2009 -- one small step forward is right !

December 22 2010 at 6:07 PM Report abuse +4 rate up rate down Reply
John Kiegiel

Inventory decrease? This time of year those that had listed properties that cannot sell take them off and put them back on in February/March in hopes of selling.

December 22 2010 at 5:37 PM Report abuse +5 rate up rate down Reply
ThinkUp70

When it comes down to real reality, something had to give way, with all the debt that Americans have accumulated with their "little plastic cards", and using home equity loans to finance the buying of their "stuff", how can anyone not believe that all the over-spending on everything had to end, and big time. One wonders if all the monetary lessons have been learned, or just put on the back burner, for future indulgence.

December 22 2010 at 5:15 PM Report abuse +4 rate up rate down Reply
1 reply to ThinkUp70's comment
mjm98103

Stick around for another 80+ years it will happen again.

December 22 2010 at 10:46 PM Report abuse rate up rate down Reply