Dennis Norman
According to the latest report released today from the National Association of REALTORS(R), existing home sales in September jumped 9.4 percent to a seasonally adjusted-annual rate of 5.57 million units in September from a level of 5.09 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Existing home sales is now at the highest level in over two years.
The home-buyer tax credit has played a major role in these positive sales numbers for September no doubt. Information from the National Association of REALTORS(R) shows that first-time home buyers have accounted for more than 45 percent of home sales in the past year, and my guess is, with buyers rushing in to buy before the tax creditexpires November 30, 2009, the percentage of first-time buyers in September was much higher. Another major component of September’s sales were distressed sales, which according to a practitioner survey by NAR accounted for 29 percent of the sales in September.
Another good piece of news is that the housing inventory is dropping and at the end of September fell 7.5 percent to 3.63 million existing homes for sale, which represents a 7.8 month supply at the current sales pace, down from a 9.3 month supply in August. The number of homes for sale is down 15.0 percent from a year ago.
The median existing home price was $174,900 in September, which is 8.5 percent lower than September 2008 when the median home price was $191,200.
Tax-Credit Expiration Could Kill It
Ok, now for the bad news…
If Congress does not extend the home-buyer tax credit plan I think we could see home sales hit the breaks and the real estate market lose what little momentum it has at this point. After-all, when NAR says sales are 9.2 percent higher than last year, we are talking about the sales PACE not actual sales, therefore if something happens to disrupt the pace we are on (such as the credits expiring) the pace most likely won’t be sustained.
If we look at actual sales data there have been 3,778,000 existing homes sold through September 30th of this year, which is just about 1 percent less than the 3,817,000 existing homes that had been sold as of the same time the year before. Therefore, it is my prediction if the credit is not extended this pace will fall back off and we will probably end up with around 4.9 to 5 million existing homes sold in 2009. If the home-buyer tax credit gets extended, and especially if it gets expanded to include more than just first-time buyers, I would expect those numbers to increase.
Related posts:
- Existing home sales drop in June; ‘Actual’ home sales highest in 12 months
- Existing Home Sales Increase In April As Tax Credits End
- Reports and headlines say home sales increased 10.1 percent in October, up 23.5 percent from a year ago; I say up 6.6 percent for the month and almost even with last year
- Existing home sales in August improve slightly reaching second-lowest rate in over fourteen years
- ‘Actual’ Existing home sales drop 5.2 percent in November; Up 4.2 percent from a year ago