Are Home Sales Tanking?
If you read some of the headlines about home sales over the last few weeks, you may believe that sales of houses in the U.S. are beginning to slow dramatically. There have been some that have used the recent Existing Home Sales Reports (EHSR) from the National Association of Realtors’ as proof of this supposition. We should be careful not to put too much credence in these reports of impeding doom.
It is true that the last EHSR revealed that sales were down 3.2% from the previous month. However, there are two crucial points that are not being addressed:
Home Sales are up 6% over the same time last year.
Part of the downturn in recent sales can be traced to the falling inventory of distressed property sales (foreclosures & short sales). Distressed homes accounted for 14% of October sales as compared to 25% in October 2012.
Sales of non-distressed properties are increasing nicely. However, as the inventory of distressed properties continues to shrink, the number of overall properties sold may diminish over the next few months. This is a sign that we are entering a much healthier housing market.