The recession originated in part in real estate, and so existing home sales have been a figure of interest. The existing home sales rose by 6.8 percent in March. It’s believed the first time homebuyer tax credit had a hand in the spike. Gains in real estate are a welcome relief, as many people couldn’t get financing or had to get mortgage loan modification.
Inventory had something to do with existing home sales
Single family homes that aren’t newly constructed are tracked in existing home sales. The March report from the National Association of Realtors recently came out. Prices are lower because more homes are available. Not that you’ll ever be able to buy a home for a couple of payday loans worth, but the sun is shining, and people are making hay, so to speak.
Inventory is up as well
CNN reports that inventory increased by 1.5%, with 3.58 million homes available. The median home price rose 0.4 percent to $ 170,000. The supply of homes dropped to an 8 month supply, or how long it would take to sell all homes at the current rates of sale. Single family homes are selling 7.3% faster, to 4.68 million homes sold per year, up from 4.36 million. In February, according to the NAR, 42% of homes sold to first time homebuyers, and it increased to 44% for March.
How did it spike so fast?
January and February weather usually affects home sales, and it was a turbulent season. The first time homebuyer credit probably helped too. A tax credit of $ 8,000 will get some people off the fence. The NAR’s Chief Economist, Lawrence Yun, said the tax credit “has been a resounding success.”
Distressed homes or foreclosures
Foreclosed or distressed homes accounted for 35 percent of total sales. Cautious buyers will often be attracted by lower prices. Yun said, “In fact, foreclosures are selling quickly, especially in the lower price range that are attractive to first time homebuyers.”
Is the housing recession over?
If we all remember Econ 101, markets constantly adjust to market conditions – simple supply and demand. Price and demand are driven lower and supply higher by depressed markets. Lower price means people that are buying get deep discounts on commodities. Supply starts to decrease, and then prices rise again. The market was always going to recover naturally, and it is starting to.
Article Resources
National Association of Realtors
http://www.realtor.org/press_room/news_releases/2010/04/ehs_favorable
CNN
http://money.cnn.com/2010/04/22/real_estate/March_existing_home_sales/
