Friday, October 24, 2008

Existing home sales jump, prices sink

Sales of existing homes rose in September, according to the latest reading on the battered housing market by an industry trade group released Friday.

The National Association of Realtors reported that sales by homeowners jumped in September to an annual pace of 5.18 million, up 1.4% from a year ago. It was the first time that sales rose compared to a year earlier since November 2005.

September sales were up 5% from the August reading of 4.91 million, marking the largest month-to-month increase since July 2003. Economists surveyed by had expected the report to show existing home sales rose to an annual pace of 4.95 million.

Though the numbers were encouraging, they do not yet suggest the problems in the housing market are behind us. September's numbers reflect contracts signed in July or August - before the mid-September credit crunch tightened the stranglehold on lending and sent confidence in the economy crashing.

Furthermore, September 2007 was also a particularly disastrous month for the housing market, as the then-emerging credit crunch resulted in a steep dive in sales of existing homes.
Prices fall sharply

Sales ticked up last month as prices continued to fall. The median price of a single-family home fell 8.6% from a year ago to $190,600.

The median price of all homes sold during the month - including single-family homes, townhomes, condominiums and co-ops - fell to $191,600, down 9% from $210,500 a year ago. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier.

The rate of existing home sales rose in every region of the country except the Northeast, where sales slipped by a seasonally adjusted 1.2%. Sales in the South rose 2.2%, while the Midwest saw an increase of 4.4%. The West saw the largest jump in sales, up a whopping 16.8%, as prices fell by 18.5% in that region.

Prices in the Northeast declined 5.4%, while the South saw a dip of 4.1%. Prices in the Midwest ticked 7.9% lower.

But the report offered the encouraging news that the excess supply of homes on the market fell in September. Realtors estimated that there are now 4.3 million homes available for sale, which represents a 9.9 month supply. That is down from the 10.6-month supply in August.

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