Existing Home Sales Take an Unexpected Jump, and so does my Phone!
With the news of existing home sales taking an unexpected jump, I find, once again, that my phone is ringing. It’s funny that pretty much any news from the housing market and I start to get calls. I know when good news is released, because I start to get the calls from clients on the east coast first, for they, it seems, always fail to remember that I live on the west coast…a full 3 time zones behind the times.
It’s always the cell phone first, or perhaps the buzzing of the blackberry that hear from the other room, and then the cell phone with the special ring that lets me know it is an office call that has been forwarded to my cell. With a blood-shot eye on the clock and pretty much stunned that anyone would call so early in the morning, I realize that something good has happened in the housing market several hours before my news radio alarm actually goes off.
This week, the National Association of Realtors reported, and rather early in the morning too, that existing homes sales jumped slightly over 5% in February from the previous month, to an adjusted rate of almost 4.75 million homes in total. Though the rate of existing hoe sales was down nearly 5% from a year ago, and about 27% from numbers in 2006, it was still the biggest month-to-month gain since July 2003.
So why the sudden shift from bad news to good? Well, that’s why my phone started to ring! There were a lot of people that morning looking for someone to tell them that the worst of it was over. Though these numbers are indeed a good sign, I think the housing market has a long way to go before we can all start patting each other on the back for surviving the storm.
According to the National Association of Realtors, the increase in existing home sales was partly due to the deep pricing discounts that are available to buyers these days. This would include properties that are distressed or in foreclosure, which many people are evidently buying up from banks, lenders, or owners simply in a financial jam. In fact, it was reported that lender-owned properties in the Las Vegas area accounted for almost 54% of the sales in February. The deep discounts are evident in the numbers posted as well, where the median price of a home in Vegas was 37% lower than a year ago, and over 50% lower than numbers posted in 2006.
The report also made mention of the inventory of unsold homes, which represents less than a 10-month supply, down form its 11-month peak not too long ago. However, the chain reaction of many other economic factors plays heavily in the housing market recovery efforts. People will continue to remain somewhat reluctant to jump into the market until there is some stability in the job market and lending sectors.
