Existing home sales jumped 10 percent in September, the biggest monthly jump on record and a signal that the housing market may be returning to a normal sales pattern post-$8,000 federal tax credit.
Existing Home Sales counts home resales (i.e. not new construction) and 80 percent of home resales close within 45-60 days. It’s no surprise, therefore, September’s data is strong.
Throughout the July and August, mortgage rates were in free-fall, pushing home affordability to near-record levels. Concurrently, the number of homes available for sale climbed to multi-year highs.
“Deals” were in ample supply this summer and eager home buyers snatched them up.
Some of these deals included “distressed properties”, a categorization that includes homes in various stages of foreclosure or short sale, accounted for 35 percent of all sales, an uptick of 1 percent from August.
According to the National Association of Realtors®, home resales split as follows:
- First-time buyers : 32 percent of all buyers
- Repeat home buyers : 50 percent of all buyers
- Investors : 18 percent of all buyers
By contrast, in November 2009, first-timers accounted for more than half of all resales.
For home buyers, September’s Existing Home Sales report foreshadows a more competitive housing market through the New Year. In addition to rising sales volume, home supplies are down by nearly 2 months from July.
At the current pace of sales, the complete housing stock would be depleted in 10.7 months.
The above represents national data. Locally, we’re still hurting. September 2010 stats are in and solds were down 27% over September 2009 and September 2008 and September 2007. This September was also down nearly 35% over September 2006 – our last ‘good’ year.