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Title: Sales of Existing U.S. Homes Rise to an Eight-Month High as Prices Decline
Source:
Bloomberg
URL Source: http://noir.bloomberg.com/apps/news ... 0601087&sid=ahusctBNjDwA&pos=2
Published: Feb 23, 2011
Author: By Bob Willis
Post Date: 2011-02-23 11:11:50 by Brian S
Keywords: None
Views: 1895
Comments: 4
Feb. 23 (Bloomberg) -- Sales of U.S. previously owned homes unexpectedly rose in January to the highest level in eight months, led by rising demand for distressed properties as investors took advantage of lower prices. Purchases increased 2.7 percent to a 5.36 million annual rate, exceeding the 5.22 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. The median price dropped to the lowest level in almost nine years and the share of sales represented by foreclosures and other distressed properties climbed to a 12-month high. Home demand has gained ground since July 2010, when sales reached the lowest level in a decade of records, as foreclosure- induced price cuts and historically low borrowing costs made buying more affordable. As job growth picks up this year, more Americans will be in a position to consider home purchases, helping to stabilize housing. “It is really a foreclosure-driven market,” said Ethan Harris, head of developed markets at Bank of America Lynch Global Research in New York. “I don’t think it is a sign of the market returning to health.” Stocks fell, extending losses a day after the biggest drop in six months for the Standard & Poor’s 500 Index, as oil prices surged and Hewlett-Packard Co.’s forecasts trailed analysts’ estimates. The S&P 500 dropped 0.1 percent to 1,314.43 at 10:34 a.m. in New York. Exceeds Median The median forecast was based on a survey of 73 economists. Estimates ranged from 4.86 million to 5.4 million. The NAR revised December’s sales pace down to 5.22 million from a previously reported 5.28 million. The agents’ group today revised data covering the past three years. A total of 4.91 million existing houses were sold last year, the fewest in 13 years and little changed from the prior estimate. The median price decreased 3.7 percent from January 2010 to $158,800, the lowest since April 2002. Sales were up 5.3 percent from January 2010, when a government tax break was still in effect. The number of previously owned homes on the market fell 5.1 percent to 3.38 million. At the current sales pace, it would take 7.6 months to sell those houses compared with 8.2 at the end of the prior month. Stable Market Month’s supply in the eight months to nine months range is consistent with stable home prices, the group has said. Lawrence Yun, chief economist at the Realtors’ group, said distressed sales accounted for 37 percent of the total and all- cash sales amounted to 32 percent, three times the average of about 10 percent. The increase in demand was “encouraging,” Yun said in a press conference as the figures were being released. “Right now it is the cleansing of distressed property that is coming on to the market” that is driving sales. Investors with all-cash offers are rushing in looking for “bargains,” he said. Yun said the agents’ group is hoping to issue its benchmark revisions by the middle of the year. The updates are usually based on census questions relating to homeownership that weren’t included in last year’s decennial population count. He said the group’s figures over the past few years may be showing a slight “upward drift” that will be corrected with the new data. Regional Breakdown Three of four regions showed increases last month, led by a 7.9 percent gain in the West. Purchases in the Northeast fell 4.6 percent. Housing, the industry that triggered the recent recession, is struggling to gain traction after the lapse of a government homebuyers’ tax credit worth up to $8,000 caused existing sales to plunge to a 3.84 million pace in July. The S&P/Case-Shiller index of home values in 20 cities fell 2.4 percent in December from a year earlier, the biggest 12- month decrease since December 2009, the group said yesterday. Prices were down 31 percent from their peak in July 2006. Industry projections reinforce the concern about housing. The number of homes receiving a foreclosure notice will climb about 20 percent in 2011, reaching a peak for the housing crisis, RealtyTrac Inc., an Irvine, California-based data seller, said last month. Rising borrowing costs represent a new hurdle. The average rate on 30-year fixed mortgages matched or exceeded 5 percent for a third period in the week ended Feb. 18, the first time that’s happened since April, the Mortgage Bankers Association said today. Rates have been rising from a record low of 4.21 percent reached in October. Builder Losses Homebuilders are still posting losses. D.R. Horton Inc., the second-largest U.S. homebuilder by stock-market value, on Jan. 27 reported a fiscal first-quarter loss that was wider than analysts expected. “I think 2011 will be a marginal, weak year in the homebuilding industry,” D.R. Horton Chief Executive Officer Donald Tomnitz said during a conference call the same day. “Given the weak macroeconomic conditions, high levels of existing homes for sale and tight mortgage availability, we remain cautious and realistic in our expectations.”
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#1. To: Brian S (#0)
Just great, people are going broke and they can't afford to pay their mortgage, so a few are able to take advantage of the situation. Ain't Obamanomics grand?
"Free-market" capitalism baby!!!
Never swear "allegiance" to anything other than the 'right to change your mind'!
BS, it's called crony capitalism, comrade. Is Queen Manchelle back from her million dollar Vail long weekend yet?
DON'T WORRY, ALL IS Socialist ass-hats think "There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." And yes, that IS from LF's answer to Ben Bernanke, go65, leading disfunctional and delusional socialist of the forum. "You want me to kill THE ENEMIES of Jappos, I'll kill THE ENEMIES of Jappos, Rebs, or Sioux, or Cheyenne... For 500 bucks a month I'll kill whoever you want. But keep one thing in mind: I'd happily kill you for free." Algren, "The Last Samurai" led by rising demand for distressed properties as investors took advantage of lower prices.
#2. To: Happy Quanzaa (#1)
Just great, people are going broke and they can't afford to pay their mortgage, so a few are able to take advantage of the situation.
#3. To: Brian S (#2)
#4. To: Brian S (#0)
Sales of U.S. previously owned homes unexpectedly rose in January to the highest level in eight months, led by rising demand for distressed properties as investors took advantage of lower prices.
WELL IN THE ECONOMY!!!
--Baghdad Brian--
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