Dec
21

Existing-Home Sales Up Despite Revisions

December 21, 2011

Yesterday, Chicago Real Estate Forum had good news to report on new-home starts. Today, there’s more good news, and this time it pertains to the sale of existing homes.

Homebuyers are finally taking advantage of the market’s highly affordable conditions: Existing-home sales rose an impressive 4 percent to a seasonally adjusted annual rate of 4.42 million in November from October, according to the National Association of Realtors® (NAR).

Those numbers are 12.2 percent above the pace recorded in November 2010.

person figure jumping for joy in front of a house with a sold sign.“Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 –- a genuine sustained sales recovery appears to be developing,” said Lawrence Yun, NAR chief economist. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”

Even more encouraging is the fact that the numbers are up despite revisions released today from the NAR after the realtor group found errors involving existing-home sales over the past five years.

To read about that, click here.

The 2010 benchmark shows there were 4,190,000 existing-home sales last year, a 14.6 percent revision from the previously projected 4,908,000 sales. For the total period of 2007 through 2010, sales and inventory were downwardly revised by 14.3 percent.

“From a consumer’s perspective, only the local market information matters and there are no changes to local multiple listing service (MLS) data or local supply-and-demand balance, or to local home prices,” Yun said.

Other statistics released by the National Association of Realtors® for November:

*The national median existing-home price was $164,200, down 3.5 percent from the same time a year ago.

*Distressed homes accounted for 29 percent of sales (19 percent were foreclosures and 10 percent were short sales), compared with 28 percent in October and 33 percent in November 2010.

*Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7-month supply at the current sales pace, down from a 7.7-month supply in October.

*Contract failures were reported by 33 percent of NAR members, notably higher than last year when it was 9 percent.

That last stat is one thing holding the housing market back from a real recovery.

“With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” said NAR President Moe Veissi.

“However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today’s market by the overly restrictive mortgage underwriting situation.”

Categories: Economy

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