March Existing Home Sales Climb

The recession originated in part in real estate, and so existing home sales have been a figure of interest. March existing home sales posted a gain of 6.8%. The first time homebuyer credit is believed to have played a part. Because so many people had been hard up to get the financing, and others went running for mortgage loan modification, any modest gains in real estate are welcome signs of relief.

Existing home sales reflect inventory

Existing home sales are defined as sales of single family homes that are not new construction — any single family residence not brand spanking new, in other words. The March report from the National Association of Realtors recently came out. More homes are available, which means lower prices. 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.

There’s also more inventory

There are 3.58 million homes available, a rise of 1.5%, according to CNN . 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. According to the NAR report, 44 percent of sales were to first time homebuyers, up from 42 percent in February.

What’s with the boom?

January and February weather usually affects home sales, and it was a turbulent season. Also, the first time homebuyer credit is believed to have affected sales. A tax credit of $ 8,000 will get some people off the fence. NAR Chief Economist Lawrence Yun said the tax credit “has been a resounding success.”

Distressed and foreclosed homes

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.”

So is the housing recession over?

If we all remember Econ 101, markets constantly adjust to market conditions – simple supply and demand. However, depressed market conditions are guaranteed to eventually reverse – as demand lowers, supply increases, and prices lower. Lower price means people that are buying get deep discounts on commodities. The supply begins to decrease, and price and demand begin to rise. The market is recovering naturally, as it always was going to.

Sources for the article

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/

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