Home sales rise again. Is this a housing recovery?
25th June, 2009 - Posted by admin - 1 Comment
The sales of existing homes rose once again this May, according to the National Association of Realtors. The May increased marked the first time that national existing-home sales rose for two months in a row since September of 2005.
This is good news for home sellers, many of whom have seen their residences languish on the market for months. But is it a sign that a true housing recovery is in progress? Unfortunately, the best answer I, or anyone else, can give is "maybe."
We'll have to see several months of sales increases to term this a true recovery. But you can't deny that any increase in existing-home sales qualifies as good news.
According to the Realtors report, existing-home sales, which includes single-family homes, condominiums and co-ops, rose 2.4 percent in May.
Of course, the bad news comes when you look at what happened last year at this time. We were already in a housing slump back in May of 2008. But even so, existing-home sales back then were 3.6 percent higher than they were in May of this year.
There's more bad news for home sellers when you look at the average price that a home sold for in May, too. According to the report, existing homes sold for a median price of $173,000. That's down 16.8 percent from a year earlier. The reason? Economists at the Realtors association pointed to the number of distressed properties that were sold in May. These properties accounted for 33 percent of all sales of existing homes in May. This was down, though, from one month earlier, when distressed properties accounted for 45 percent of all sales of existing homes.
Is the housing slump over, then? Not quite. In fact, don't be surprised if, after summer ends, we see the number of housing sales fall once again. That traditionally happens, and there's no reason why it won't happen again this year.
It's going to take a long time for the housing market to recover its vibrancy. And the truth is, it will probably never return to the go-go pace of the recent housing boom. That market was one built on false promises of wealth and on mortgage money that was too easy to get.
Those days are behind us. And, really, that's good news for the housing industry.
Posted on: June 25, 2009
Filed under: mortgage news
1 Comment
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January 25th, 2011 at 6:56 pm
Some respondents even.
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