By: Dennis Norman
This morning the National Association of REALTORS(R) released data for existing home sales for November. The numbers show sales of existing homes down 8.6% nationwide versus October and down 10.6% versus last year. The Northeast saw the biggest decline in sales being down 12.0% versus last month and 18.0% versus last year. The west region only showed a 4.3% decrease for the month and is actually showing an increase of almost 18% versus last year. The report indicated there are 4,203,000 homes for sale which is almost the same as the month before and down slightly from last year.
The National Association of REALTORS(R) reported median home prices down nationwide almost 3% from October to November and down over 13% versus last year. Ironically the region with the biggest decrease in sales, the Northeast, saw almost no drop in median price versus last year and the West, which has increased sales over last year has seen over a 25% drop in median price in the past year. It is obvious that in the West prices have dropped enough to get buyers attention and if the Northeast region wants to see sales increase then sellers are going to have to adjust prices downward.
The National Association of REALTORS(R) also released their Consumer Confidence Index report for November 2008 which contained good news in that the consumer confidence index was up 15.72% from October to 44.9. This is still down 48% from 1 year before when the index was at 87.80.
Also this morning, the United States Department of Commerce released data based on a joint report from the US Census Bureau and Department of Housing and Urban Development for new home sales for November. These numbers painted an even more bleak picture showing new home sales for November 2008 down almost 3% from October at a seasonally adjusted annual rate of 407,000 homes. This annual rate of new home sales is down over 35% from one year ago when the November 2007 estimate annual rate was 629,000 homes. The median new home sales price for November 2008 was $220,400. The report stated there are 374,000 new homes for sale as of November 2008 translating into a 11.5 month supply at the current sales rates which is almost double the 5 to 6 month supply that would be considered more normal.
Meanwhile interest rates for home mortgages are at historically low rates. For the week ending December 18, 2008 Freddie Mac reported that at an average of 5.19% 30 year fixed rate mortgages had fallen to the lowest rate in at least the past 37 years (when Freddie Mac first started doing the interest rate survey).
What this means for the consumer, in my opinion, is if you are in a position to buy a home you should take advantage of the opportunities that are out there and buy one now. Home prices are down, interest rates are at historic lows and yet there is a good supply of homes for sale to choose from. Yes, prices could continue to fall yet more in some markets, however it appears we may be close to the bottom. Unfortunately the only way to truly know if home prices have hit bottom is to wait until it has passed as the only real proof of where the bottom was will be rising prices. In other words if you wait for confirmation of the bottom it prices will already be on the rise and who knows if interest rates will still be this attractive.
I should point out I am not suggesting you buy a home with the idea of “flipping” it or reselling it in the near future at a profit. I’m saying if you feel comfortable with your financial position, secure about your job or source of income and want a home you and your family can enjoy for at least a few years then I think now is the time to buy. Even if in the short term prices erode a little further I think by the time you are ready to move again you will have not only received the true value of your home, which is the “history” you and your family have made there, but you will also end up with what was a good financial investment.
Happy house-hunting. To find out more about your local market as well as homes for sale in your area contact your local professional REALTOR®.
Related posts:
- Existing home sales increase in November; Down almost 28 percent from a year ago
- ‘Actual’ Existing home sales drop 5.2 percent in November; Up 4.2 percent from a year ago
- Existing homes sales in U.S. up 5.1% in February
- New home sales and prices increase in November
- Florida’s Existing Home, Condo Sales Up in November 2009