Existing Home Sales Surge to Highest Level Since February 2007
Existing home sales surge
Following the upward trend since spring of this year, existing home sales surged this October by 10% as 6.1 million units sold, and sales were 23.5% higher this October than last. According to the National Association of Realtors, the surge was driven by the first-time buyer tax credit
Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”
Will inventory levels remain this low?
It is unlikely that this run up will occur in such numbers as the extended tax credit expires next spring and with shadow inventories of foreclosures withheld from the markets, inventories may not remain at this rate for long so perhaps we should relish in the news yet brace for the coming year?
Chicago, Illinois Realtor Tim McDonald of Zoom Real Estate said, “with high unemployment and large number of ARM resets coming over the next two years, I don’t foresee us being out of the woods yet. While it may be the best time to buy (with low interest rates, tax credit, and low prices), I think it also may be the best time to sell in the next 2 years (higher inventory of REOs, rising interest rates, higher unemployment and no more tax credit).”
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This article published on Tuesday, November 24th, 2009 at 12:01 am | Contact the editor
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Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
All real estate being local – our area did not surge by 10% – although October did beat last year’s figures by about 4%. Since the Tax Credit extension was not completed until late in the first week of November, I anticipate November’s numbers will also be better – since many closings (50%-plus, if NAR is to be believed) will be from First Timers trying to beat out the credit.
Our Senator – Johnny Isakson (R-GA) – recently spoke at our board office. He was adamant that the credit will not be extended again, and the reasoning in Congress for the credit (and the extension) had a lot more to do with protecting home value equity (more like stopping the equity hemorrhage) than it did with boosting sales.
Either way – it smells like the bottom, it feels like the bottom, it looks like the bottom. Too bad we have to step in it.
Navy Chief, Navy Pride
We are seeing some stabilization, which could be considered surge considering we were going south quickly over the past two years.
I have little to no faith in future predictions, but if the consumers are starting to stick their toe in the water-of-faith than perhaps we’ll begin the process of getting over these bad times. It’ll be slow regardless. It all comes back to the trust in the market…