Oct 1, 2009

Home Sales Are UP !

Hello Neighbors,

Two blog posts today....

The first one is from the NAR (National Association of Realtors) chief economist - Lawrence Yun - on the recovery underway! Thanks NAR!

The second? Direct contrast to the first. "Shadow Inventory". Stay tuned... here's the first:

Headed in the Right Direction:

Numbers Show Sales are Up and Heading in the Right Direction

Pending home sales in July reached their highest mark in two years, and closed sales also continued on an upward path. As a result, inventories are tightening; in June there were 3.8 million properties for sale nationally, compared with 4.5 million at the same time last year.

More broadly, there are other indications the economy is heading up. Durable goods orders have risen for three straight months because business inventories have been depleted. The stock market has also made a nice comeback, and exports have been rising faster than imports.

Thanks to these promising signs, we forecast higher home sales and stabilizing prices in the year ahead. But there are still some concerns.

First, although inventories are improving, it’s possible that many owners want to put their house on the market but are waiting for conditions to improve. Banks may be doing the same with their foreclosed properties. These concerns might be off the mark; in areas where housing has been recovering, we would expect to see inventories softening as ¬sellers and banks jump back in, but we haven’t been seeing that.

Beyond the housing market, there are other economic factors that could hold back recovery. The country is looking at a continuing long-term budget deficit that could translate into higher mortgage rates. We’re also looking at rising oil prices ($70 from $50 earlier this year), with that extra money shipping overseas rather than staying home. And heavy job losses make it likely foreclosures will keep rising through the remainder of the year.

Still, we have reason to be confident. With home sales heading up and inventories shrinking, prices are stabilizing. These are the key conditions needed for housing to lead the economy into growth mode. Once that happens, jobs will follow.

Thanks NAR, the recovery is more than a welcomed visitor... it's a way overdue guest.

- Jim




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