7/29/2009

Existing Home Sales Rise for Third Straight Month

It's starting to sound like a broken record but we keep getting more and more positive news about the housing market.

The National Association of Realtors reported that sales of previously owned homes increased at a faster-than-expected annual pace. Existing home sales increased at a 3.6% rate and had its third straight monthly gain.

This is the first time since early 2004 that we have had three straight months of increasing sales and points to the housing market continuing to heat up. They also reported that inventories of existing homes were down 0.7%. With inventories declining and home sales increasing, now is the time to jump into the market before these low home prices are history.


Which leads to another topic that has been making the rounds: that there is a "shadow" inventory held by banks which when released onto the market, will bring prices down even further. Not so fast, say some mortgage brokers I've talked to. It's very unlikely that large amounts of such inventory will be released simultaneously by banks. For one thing, major lenders are in the process of negotiating many loan modifications and would probably not release major inventory onto the market in any one area which could then depress prices, and their existing mortgage loans, even further. It could also depress equity sellers' values causing some of those to go into short sales if prices declined due to a flood of REO inventory.


The fact is, the $300,000 price range is and has been very competitive for investor buyers, and almost impossible for first-time owner occupant buyers for months now.


As the sales activity has indicated, what we need are more reasonably priced listings on the market. Sellers, are you listening?
See www.juliahuntsman.com for more real estate information.

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