Network News

X My Profile
View More Activity
2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Oct. existing home sales jump record 10.1 percent

Existing home sales in October jumped a record 10.1 percent, according to data released moments ago, thanks to buyers rushing in to take advantage of the first-time home buyers' credit before it was set to expire.

Sales are up 23.5 percent since their lows in October 2008, which also is a record for year-over-year jump, according to the National Association of Realtors.

It's not clear the surge represents a bottoming out of the housing market, as the sales are still not happening organically--that is to say, without a government incentive. And now that the home buyers' credit has been extended to April, we won't know if we have an organic, non-subsidized bottom until after then.

The median sales price of an existing home in October was $173,100, down 7.1 percent from October 2008. That's the smallest decline in median home price in more than a year.

How October existing home sales broke down by region of the country:

Northeast: up 11.6 percent.

Midwest: up 14.4 percent.

South: up 12.7 percent.

West: up 1.6 percent.

Why is the number up so little in the West? Remember, the biggest foreclosure home states -- that is to say, the ones that were overbuilt the most during the housing bubble -- were California, Nevada and Arizona.

Existing home inventories are down to a seven-month supply. A healthy housing market is generally regarded to have a six-month inventory of unsold homes.

And let's be clear about this: sales of distressed homes accounted for between 33 and 40 percent of all existing home sales in October, according to the data, so that shows investors are still bottom-feeding off people who've lost their homes. On the other hand, some of those people who lost their homes got mortgages they could not afford and never should have stopped being renters, so that's a necessary adjustment on the system.

On the upside, for the first time in more than a year, we're starting to see some movement in sales of more expensive homes, not just bargain-basement ones that are in foreclosure.

The October figures show some uptick in sales of homes in the $250,000 to $500,000 price range, but nothing yet in the $750,000 and up range.

-- Frank Ahrens
Sign up to get The Ticker on Twitter

By Frank Ahrens  |  November 23, 2009; 10:20 AM ET
Categories:  The Ticker  | Tags: existing home sales  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Stocks open week with strong rally
Next: For spinoff, AOL rebrands itself as Aol.


Maybe if the government stopped mucking around with the market, housing prices would find their natural, sustainable level.

Until then, I wouldn't stake too much in these kinds of trends.

Posted by: postfan1 | November 23, 2009 10:53 AM | Report abuse

more proof that the communist fascist socialist totalitarian Kenyan Muslim terrorist agenda is ruining America. Next thing you know the bush depression will be over because of the brilliant policies laid down by st. reagan and people will see that President Obama and the Democrats hate freedom.

Posted by: John1263 | November 23, 2009 11:12 AM | Report abuse

the real estate market is getting

addicted to govt stimulus crack

and withdrawal can be fatal

while continued use can be terminal

so under obama socialism, the real estate market will never stabilize without jobs

no mater how much fannnie mae fruad obama and barney frank initiate

Posted by: ProCounsel | November 23, 2009 11:14 AM | Report abuse

Existing home sales are up! New home sales are up! The Dow is up! Unemployment is down! Yay! The recession is over! Woo hoo!

Oh, wait, this is Monday's headline. Tomorrow, the economic experts will be taking it all back again.

Posted by: c0lnag0 | November 23, 2009 11:18 AM | Report abuse

Wait till the health care bill runs amuck and see the economy. People are not scared but they don't know what is coming down the pioeline of Obama Administratio

Posted by: jayrkay | November 23, 2009 11:22 AM | Report abuse

I am amused that the Republicans hated the stimulas plan, which half was tax decreases for the middle class. Now the Republicans hate this tax credit for the middle class to purchase homes. Are not Republicans usually in favor of tax cuts? Do Republicans only like tax cuts when the it favors their patrons, the wealthy? The inventory of unsold homes is dropping signficantly and that will help the economy. Good job Obama and team!!

Posted by: merrylees | November 23, 2009 11:39 AM | Report abuse

Housing boom is back! .... Each year house prices will rise 20%. It's the free market in operation.

Free market only works on the way up - on the way down, we need bailouts and foreclosure prevention programs and loan restructuring.

The entire housing "ponzi" scheme run by the government is unraveling! --- if we get the government support out, it will be fail like any other ponzi scheme.

Posted by: free_np | November 23, 2009 12:00 PM | Report abuse

Houses just didn't double in real value in 5 years, so it will take a while for inflation of the dollar to catch up. Expect prices to drift down a bit.

The value of the dollar will continue to diminish as congress prints more bills without any revenue to back them up.

Posted by: postfan1 | November 23, 2009 12:03 PM | Report abuse

I smell another BAILOUT.

Posted by: morphylius | November 23, 2009 12:13 PM | Report abuse

Why should I consider this 10.1% jump good news? "First time home buyers" are people who are young and/or a poor credit risk. In other words, if unemployment increases next year, they are the ones most likely to lose their jobs. That would add significantly to the 14% of homes in foreclosures right now.

Posted by: penniless_taxpayer | November 23, 2009 12:22 PM | Report abuse

"People who lost their homes got mortgages they could not afford and never should have stopped being renters"- Yes, the days of hiring licened professionals who explained they were still working with the lender for approval while having you sign to speed up the process. And then hiding Form 1003 "loan application" from mortgage papers so you'd never discover the falsified income. Are those the renters your talking about.

The West is wise. The first wave has pasted and most are running for cover. But as the ocean exposes itself,the optomistic are running out to sea to buy more land. They fail to realize the Option-Arm ALTA-A tidal wave is still coming.

Posted by: steveherb | November 23, 2009 12:41 PM | Report abuse

With a sizeable percentage of sales attributed to "bottom-feeding" re distressed homes, and (the continuing) government incentives for first-time buyers, the data is obviously SKEWED. Like the "cash for clunkers" program, as soon as our federal government discontinues the use of our TAX DOLLARS to support the same industry that gorged itself on the sub-prime frenzy (at tremendous profits), existing home sales will inevitably dip.
There is a price to be paid for every federal give-away... many will roost in the next generation of Americans. The corruption of our political system by powerful corporate/industry groups represents the same mind-set as our government... the belief that tomorrow will never arrive, and that our accumulation of voluminous, extraneous debts will never be called.

Posted by: leedolce | November 23, 2009 8:05 PM | Report abuse

The comments to this entry are closed.

RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company