Existing Home Sales Drop But Prices Continue Climb
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Home sales, at least those of existing homes, fell to a seasonally adjusted annual
rate of 6.97 million units in November according to the sales report issued on
Thursday by the National Association of Realtors (NAR). This is a 1.7 percent
decrease from the 7.09 million units sold in October. Sales were also off 0.1
percent from the 6.98 million level established in November, 2004.
David Lereah, NAR's chief economist said that rising interest rates were
responsible for decreasing sales, but said that "The current pace of homes
sales activity remains historically strong." He noted that only eight
other months have seen a high rate of sales. He projected that 2006 would, in
spite of the interest rate situation, mark the second best year for home sales
(after 2005) since the NAR started keeping records.
The median price for an existing home in November was $215,000, an increase
of 13.2 percent from November, 2004 when the median was $190,000.
Housing inventory levels were up 1.2 percent at the end of
November with 2.90 million existing homes (new construction is tracked separately)
for sale. This is a 5 month supply at the current absorption or sales rate.
Single family home sales dropped 1.9 percent from October figures to a seasonally
adjusted rate of 6.11 million units. This was down 0.5 percent from levels a
year ago. Prices, however, increased 13.5 percent over the year to a median
sales price of $213,500.
Condos and cooperatives lost 0.8 percent in volume to a seasonally adjusted
rate of 857,000 in November, 7,000 less than October levels and 2.0 percent
higher than the 840,000 existing condo/coop sales recorded in November 2004.
The median condo price was $225,300; 10.7 percent higher than in November 2004.
The report notes that, because the majority of condo sales are in major metropolitan
areas, the median sales price tracks higher than the median price for single
family homes which are more generally distributed.
The drop in home sales was most notable in the West where
sales fell 3.7 percent between October and November to 1.58 million, a decline
that was identical to that recorded since November of last year. Still, median
house prices managed to increase nearly 20 percent to a median of $328,000 over
the course of that one year period.
The Northeast region also saw sales decline 2.7 percent since October and were
4.4 percent lower than one year earlier. The median price rose 9.2 percent over
the year to $250,000.
The Midwest, which usually fares the worst in surveys of housing sales and
appreciation, slipped only 1.3 percent to an annually adjusted level of 1.56
million homes. This is 0.6 less than November, 2004 and prices increased 10.4
percent to a median of $170,000.
The South was the market least impacted by falling sales. Existing home sales
slipped by 0.7 percent to 2.74 million units but this was still an increase
of 3.8 percent from the previous year. The median price in the South also went
up 8.2 percent to $184,000 over November, 2004.
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