Monday, November 23, 2009

Home Sales at Highest Level and Months Supply of Inventory at Lowest Level, Both Since Feb. 2007

Highlights from today's report on existing home sales:

1. Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1% to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5% above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

2. The inventory of existing homes for sale in October fell to 3.57 million homes, the lowest level in more than a year. At the current sales pace, there is now a 7.0 months supply of existing homes, which is the lowest level since February 2007, more than two and a half years ago (see top chart above). Compared to the peak of 11.3 months supply of inventory in April, October's 7.0 months supply represents a reduction of 4.3 months.

Bottom Line: The national real estate market is gradually recovering as the balance between the supply and demand (measured by the months supply of inventory) has returned to the 2006-2007 levels, suggesting that the worst is definitely behind us.


At 11/23/2009 1:11 PM, Blogger Unknown said...

The worst is definitely behind us - until they have to pull the life support from Real Estate and increase the interest rate.


Viva la bubbles.

At 11/23/2009 1:41 PM, Anonymous Benny Telling It Like It Is said...

Die, recession, die, die, die!
Looks like the recovery is well underway, especially in Asia and Europe.
Asia on the cusp of another 20-year boom.
Lots of capital out there--the world generates chronic excess capital. Invest now in front of the flood.
Venture capital galore out there.
Boom times coming.

At 11/23/2009 1:47 PM, Blogger KO said...

I would feel better about the housing market if it had been allowed to overshoot low. Instead there's the new homebuyer credit, now the tradeup credit, extremely low interest rates courtesy of the Fed, and lots of other programs to soft land prices.

The newest government program soon to be abused up is USDA guaranteed 0% down loans. Net $8,000 from the government to buy a house.

At 11/23/2009 2:25 PM, Anonymous morganovich said...

amazing what injecting a little over a trillion dollars of fed money into a market can do.

they have bought $850bn in mbs's and $175 bn in freddy/fannie debt.

they essentially are the market and are heavily subsidizing mortgages.

the tricky bit, is what happens when they stop?

looks like the 3/2010 deadline is getting softer, but even a gradual withdrawal is going to create pressure.

this is going to be a very tricky perch to climb down off of.

i doubt helicopter ben and co are up to it.

At 11/23/2009 7:02 PM, Blogger juandos said...

Hmmm, good news, eh?

Consider the following from the Business Insider: CHART OF THE DAY: The "Distressing" Gap Between New And Existing Home Sales

"The recent spike in existing home sales was due primarily to the first time homebuyer tax credit"...


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