Existing Home Sales

by Tom on October 23, 2009
in Market Musings, banks, house prices

Well, this would be a very good report if it weren’t for a couple of things:

It’s a government subsidized boost to the market. As we talked about before, the National Association of Realtors is estimating that there would be 334,000 less sales this year if it weren’t for the $8,000 tax credit. Oh, and the window of opportunity on the tax credit has almost closed. If you don’t sign a purchase agreement by a week from next Monday (November 2), you’ve got almost no chance of getting things closed by the end of November. Keep in mind that the Thanksgiving holiday weekend happens right at a crucial time for closings.
If the $8,000 tax credit does get extended, I expect you’ll see it behave similarly to the cash for clunkers stimulus did. It got extended and even though it got extended, the demand went way down.

It’s a good report, but given market dynamics, I really don’t expect that trend to continue over the next few months.

Sorry, but I don’t.

Tom Vanderwell

U.S. existing-home sales rise 9.4% to 5.57 million – MarketWatch

Resales of U.S. houses jumped 9.4% in September to a seasonally adjusted annual rate of 5.57 million, the highest in more than two years, the National Association of Realtors estimated Friday. Sales as tracked by the NAR are up 24% from January’s bottom, and are up 9.2% compared with a year ago. The median forecast by economists surveyed by MarketWatch looked for a smaller gain to a 5.38 million annual rate from a downwardly revised 5.09 million in August. “Sales surged” in September, said Lawrence Yun, chief economist for the real estate trade group, who gave much of the credit for the increase to the federal government’s soon-to-expire $8,000 tax credit for first-time home buyers

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