Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from August, and are 1.4 percent higher than in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. "The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island," he said. "The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike."
NAR reported the national median existing-home price for all housing types was $191,600 in September, down 9 percent from a year ago when the median was $210,500.
"Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices," Yun explained.
NAR President Richard F. Gaylord said low home prices and low interest rates have been attracting buyers. "This is the first time since November 2005 that home sales have been above year-ago levels," he said. "Credit tightened at the end of September, but the improvement demonstrates that buyers who've been on the sidelines want to get into the market to make a long-term investment in their future."
Yun said there may be market disruptions. "The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners," he said. "Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory."
In California, the California Association of REALTORS® recently reported home sales in the state increased 96.7 percent in September compared with the same period a year ago, while the median price of an existing home fell 40.9 percent. Speaking to members of the Silicon Valley Association of REALTORS®, Vince Malta, past president of the state trade association, said he is seeing investors coming back to many of the markets in California, as well as the heavy presence of international buyers, who are finding great opportunities in the California housing market due to the improved affordability and still low interest rates.
Malta reminded local Realtors about the conforming loan limits. The temporary conforming loan limit of $729,750 will disappear on Dec. 31, 2008, and the new conforming loan limit of $625,500 will take effect. Malta said one of the items C.A.R. will tackle after the November 4th election is to push to make the $729,750 temporary conforming loan limit permanent.
Malta said C.A.R. will also look at its vision for Fannie Mae and Freddie Mac.
"We will examine what principles do we deem important? If secondary markets don't exist, there will be no money to lend money to buyers," Malta said. "If Fannie Mae and Freddie Mac do not exist, there will virtually be no loans."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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