Posted on 12/29/2005 1:40:06 PM PST by Pragmatic_View
Existing-home sales declined in November while home prices sustained double-digit annual gains, the NATIONAL ASSOCIATION OF REALTORS® reports.
Total existing-home sales—including single-family, townhomes, condominiums and co-ops— eased 1.7 percent to a seasonally adjusted annual rate of 6.97 million units in November from a pace of 7.09 million in October. Sales were 0.1 percent below the 6.98 million-unit level in November 2004.
David Lereah, NAR’s chief economist, says higher mortgage interest rates were responsible for moderating sales, but notes that it’s important to keep an eye on the actual level of home sales given the market surge this year.
“The current pace of home sales activity remains historically strong—only eight months have had a higher sales pace,” he says. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”
The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.33 percent in November, up from 6.07 percent in October, according to Freddie Mac. The rate was 5.73 percent in November 2004. Last week, Freddie Mac reported the 30-year fixed rate eased back to 6.26 percent.
The national median existing-home price for all housing types was $215,000 in November, up 13.2 percent from November 2004 when the median was $190,000. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR President Thomas M. Stevens from Vienna, Va., says housing inventory levels are improving.
“As more listings of homes come on the market during this period of modestly declining sales, more home buyers will find themselves in a better position to negotiate,” says Stevens, senior vice president of NRT Inc. “Most home sellers will see excellent returns on their investment, but should understand that double-digit annual increases will become less common in the coming year.”
Total housing inventory levels rose 1.2 percent at the end of November to 2.90 million existing homes available for sale, which represents a 5-month supply at the current sales pace.
Single-family home sales were down 1.9 percent to a seasonally adjusted annual rate of 6.11 million in November from 6.23 million in October, and were 0.5 percent below a 6.14 million-unit pace in November 2004. The median single-family home price was $213,500 in November, 13.5 percent higher than a year ago.
Existing condominium and cooperative housing sales slipped 0.8 percent to a seasonally adjusted annual rate of 857,000 units in November from a level of 864,000 in October. Last month’s sales activity was 2.0 percent higher than the 840,000-unit pace in November 2004. The median condo price was $225,300, up 10.7 percent from a year ago.
Regionally, total existing-home sales in the South eased by 0.7 percent in November to a level of 2.74 million, but were 3.8 percent higher than November 2004. The median price in the South was $184,000, up 8.2 percent from November 2004.
Existing-home sales in the Midwest slipped 1.3 percent to annual pace of 1.56 million in November, and were 0.6 percent below a year ago. The median price in the Midwest was $170,000, which was 10.4 percent higher than November 2004.
Total existing-home sales in the Northeast declined 2.7 percent to an annual sales rate of 1.09 million units in November, and were 4.4 percent lower than November 2004. The median price in the Northeast was $250,000, up 9.2 percent from a year ago.
Existing-home sales in the West fell 3.7 percent to a pace of 1.58 million in November, and were 3.7 percent below a year ago. The median existing-home price in the West was $328,000, up 19.3 percent from November 2004.
—NAR
Editor's Note: For more housing market statistics and research reports,visit NAR's Research Department at REALTOR.org.
While the drop in sales from Oct to Nov. was 1.7%, the drop in sales from 2004 Nov. to 2005 Nov. was only 0.1%.
The national median home price from Nov. 2004 to Nov. 2005 was up 13.2%, not too bad at all. (See details of regional sales and prices in second half of the article).
Here in Sacramento prices went up 60% in three years, then topped out last spring. Since then there has been a slight decline in prices, and a glut of unsold homes. A lot of people bought at the peak with 100% interest only stated income loans assuming that prices would keep climbing and they would have equity to refinance with later. Now they are making payments they can barely afford on homes that are worth less than they paid for them.
It may hurt speculators or unwise investors, but if people bought their homes to live in it, and are able to make the payments, in the long run, real estate does go up.
I came across a detailed historical summary of home prices since 1968:
http://www.huduser.org/periodicals/ushmc/fall05/USHMC_05Q3.pdf
go to page 65 of the document.
The median price in 1970 was $23,000 and in 2004 it was $185,500, an average appreciation of over 6% or so.
Fuuny, I just heard on the Radio this morning from the Phoenix Building permit Dept. that permits for houses were up this year in Phoenix. I think they issued more than 60,000 building permits for new homes this year..
That is outside of CA. People in CA that bought recently on an interest only loan are going to be in for a huge shock.
We have friends who purchased a home for near $800K - sold their old one for $900K. However, they went for interest only and are now a bit afraid.
Another friend put EVERYTHING she has into buying out her ex-husband. The reason? Her 3 dogs and 9 cats. . .now every month the payment goes up. She is barely making her mortgage payment each month and she and her 3 year old are having to eat at various family member homes every night.
"Another friend put EVERYTHING she has into buying out her ex-husband. The reason? Her 3 dogs and 9 cats. . .now every month the payment goes up. She is barely making her mortgage payment each month and she and her 3 year old are having to eat at various family member homes every night."
Not a real estate problem.
"It may hurt speculators or unwise investors, but if people bought their homes to live in it, and are able to make the payments, in the long run, real estate does go up."
Thanks for giving that excellent advice. Real Estate is a long term consideration.
Real Estate is FIRST a person's (or family's) shelter. Adults pay a fraction of their income, for shelter. They rent or buy.
Real Estate can SECONDLY be an investment, if one buys. It must be seen in the long term, beyond normal cyclical changes.
Overextending to buy real estate, thinking in the short term, is very risky. But a lot of people have made money, during regional price run-ups.
Good data from HUD, on the link.
Oh - don't I know it! She is my friend but her common sense is sadly lacking. However, not my problem!
In other news, coat sales rise as temperatures plumment.
You might want to encourage your friend to get a fixed rate mortgage, if she can qualify for that, that way she never has to worry about the payments going up, and interest rates are still pretty low.
Also sounds like she should see a financial advisor -- not one to tell her how to invest, but someone to help her assess her situation.
If she can't feed her kids, or uses that excuse for the kids to eat at relatives, if she isn't in big trouble now, she will be, and this is the time to do a serious assessment, not wait until she ends up not being able to make her mortgage payments.
I don't know if she will listen to you, but you, as a friend can at least try to help her get some good advice and help.
Why are you feeding the doom and gloomers? Do you feel a cloud of impending doom is hovering over Sacramento's housing market? Why isn't Tom Sullivan and other RE investment guru's talking about this impending crisis you seem to be painting?
I think you need to do a little fact checking before you yell "fire" in a crouded theatre, so to speak!!!
Real estate marker.
Well to give you an idea, last April I was looking at homes in Folsom for under 400k. There were 4 listed. I just checked now and there are 36. Back then many people were getting multiple offers on their first weekend open houses. Now I'm seeing houses that were listed back in August. Houses are being reduced from the original listing price.
I'm not preaching gloom and doom, but those are indications of an overabundance of sellers compared to buyers.
I'm so giddy I can't wait for the bankruptcy auctions that are sure to become popular in 2006! Why buy now at rip off prices when you just know the values of the homes in the West Coast are going to drop like a stone?
Actually this trend started in May, when home sales traditionally are picking up.
Why is it surprizing that after a 60% run up in prices over three years of record low interest rates, that when interest rates start going up prices come down? I'm not predicting a crash, but some people who bought in at the peak with 100% interest only loans and variable interest rates are going to find themselves overextended with negative equity and rising payments, and unable to refinance.
BTW, I am a former realtor (still licensed). I have heard realtors tell people not to worry about those loans because in a few months the prices would go up and they could refinance to a fixed with the equity they would have. I wouldn't be surprised if they get sued for it.
The trend in may increased the value of my home between 100-150 g's ... I don't really mind a correction. of 20-50g.
Sold a house in October for 120% above the Mortgage. My mother sold her Duplex for 350% above her mortgage. What is your point? Seriously, I don't get it. So your a realator.. and?
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