Hot Housing Market Begins To Cool
editor's comments |
Existing home sales showed signs of cooling off in October,
with a decline in both single-family and condo sales, according to the
National Association of Realtors. Total existing-home sales were down
2.7% from September’s pace. However, sales were 3.7% above the level
in October 2004. (See comments)
The national median existing-home price for all housing types was $218,000
in October, rising 16.6% from October 2004 when the median price was
$187,000.
Total housing inventory levels rose 3.5% at the end of October to a
4.9-month supply at the current sales pace.
According to Freddie Mac, the national average commitment rate for a
30-year, conventional, fixed-rate mortgage was 6.07% in October, up
from 5.77% in September; the rate was 5.72% in October 2004.
Single-family home sales in units dropped 2.5% from September, but were
3.3% above the unit level in October 2004. The median single-family home
price was $216,200 in October, up 16.6% from a year ago.
Nationally, existing condominium and cooperative housing sales fell 4.4%
from September. October 2005 sales activity was 6.7% above October 2004.
The median condo price was $229,800, up 15.3% from a year ago.
Regionally, existing-home sales in the West fell 1.2% in October
and were 3.8% higher than October 2004. The median price in the West was
$316,000, up 16.2% from October 2004.
Total existing-home sales in the South declined 1.8% and were 7%
above October 2004. The median price in the South was $196,000, up 18.1%
from a year ago.
Existing-home sales in the Midwest fell 1.9% to annual pace of 1.58
million units in October, and were 1.3% higher than a year ago. The median
price in the Midwest was $170,000, which was 10.4% higher than October
2004.
Total existing-home sales in the Northeast declined 7.4% to
a pace of 1.12 million units in October, and were unchanged compared to a
year ago. The median existing-home price in the Northeast was $252,000, up
10.5% from a year ago.
Source: National Association Of Realtors
November 28, 2005 |
Editor's Comments
It's worth remembering however, that these sales figures lag the market
by approximately sixty to ninety days (i.e. homes going under agreement
today will not be reflected in the stats as reported by the NAR until the
month after they close. In many markets, brokers are already seeing sales
slow significantly, although prices may be holding strong. This upholds
the opinion of the NAR that the market will experience a soft landing.
However, this could change if we see a large number of foreclosures in a
market with over-supply. Any market that experiences higher foreclosures
will see a downward pressure on the average selling price as the
foreclosure prices get factored into the historic price trends.
National statistics often hide huge regional swings in numbers so it's
important to know what's happening in your local market. Although the
national averages show a 4.9% supply of homes for sale, there are some
towns with much less inventory and others with over 12 months! While the
overall market may be giving the impression of a smooth landing, some
specific markets may experience a more painful adjustment, particularly
where inventory levels are at record levels. (You should ask your home
investor specialist / broker what the inventory levels are for your home
town. If they don't know how to get this figure you should find another
broker). |
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