Existing home sales number continue to creep up

(Published Jan. 3, 2007, 9:38 a.m.)

Existing home sales rose for a second straight month in November; however they continue to lag from levels of a year ago according to a report released a week ago, from the National Association of Realtors.

Total existing-home sales -- including single-family, townhomes, condominiums and co-ops -- rose 0.6 percent to a seasonally adjusted annual rate of 6.28 million units in November from a level of 6.24 million in October, but were 10.7 percent below the 7.03 million-unit pace in November 2005.

In Walworth County, figures provided by the Lakes Area Realtor's Association showed that the median existing home price in the county rose to $200,000 in the third quarter of 2006 from $188,000 during the same period a year earlier. The rise was 6.4 percent.

In the same period, existing home sales dropped to 476 from 596 a year earlier, a decline of 18.6 percent.

David Lereah, NAR's chief economist, was quoted in a news release a saying he was encouraged by the turnaround in the first two months of the fourth quarter. "As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007 - it looks like we may have reached the low point for the current cycle in September," he said. "We've entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down."

Total housing inventory levels fell 1.0 percent at the end of November to 3.82 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.

The national median existing-home price for all housing types was $218,000 in November, which is 3.1 percent lower than November 2005 when the median price was $225,000. The median is a typical market price where half of the homes sold for more and half sold for less. "For every 1.0 percent drop in home prices, we project an additional 50,000 buyers are drawn into the market," Lereah said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.24 percent in November, down from 6.36 percent in October; the rate was 6.33 percent in November 2005.

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, was quoted as saying the performance of long-term interest rates is a pleasant surprise.

"Mortgage interest rates are the lowest they've been since January, and it's the first time since August of 2005 that interest rates are lower than a year earlier," said Combs. "This is increasing buying power at the same time that sellers are showing a willingness to negotiate price and terms. Combined with a plentiful supply of homes on the market, there's a window for buyers now with conditions that we haven't seen prior to the beginning of the housing boom in 2001."

Single family home sales increased 0.2 percent to a seasonally adjusted annual rate of 5.52 million in November from a pace of 5.51 million in October, but were 10.2 percent lower than the 6.15 million-unit level in November 2005. The median existing single-family home price was $217,200 in November, which is 3.6 percent lower than a year ago.

Existing condominium and cooperative housing sales rose 3.1 percent to a seasonally adjusted annual rate of 757,000 units in November from a downwardly revised 734,000 in October, but were 13.6 percent below the 876,000-unit pace in November 2005. The median existing condo price was $224,600 in November, which is unchanged from a year ago.

Existing-home sales in the Midwest were unchanged in November, holding at a level of 1.42 million, and were 9.6 percent lower than November 2005. The median price in the Midwest was $165,000, which is 3.5 percent below a year ago.



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