Existing Home Sales Decline; Prices Rise for Seventh Consecutive Month

The real estate industry is a great way to gauge the economic health and recovery of the nation. Home ownership is one of the most expensive and biggest investments that people will make. The appreciation, depreciation, and transaction of these properties reflect other parameters of the economy such as job creation, unemployment, interest rates, and money being spent or invested. Existing home sales have declined, but prices have risen for the seventh consecutive month. This sends a mixed message and gives the bitter sweet notion of how things could be better, yet could be worse.

Home sales have decreased for seven consecutive months, however it is in the mist of a still overall economic recovery from years ago. Despite the recent decline, home sales are 11 percent higher than the same time last year in 2011. The sale of residential properties that include single-family homes, condos, town homes, duplexes, and co-ops are all included in the home sales. Existing home sales declined by 1.7 percent from the previous month in September to 4.75 million units being sold. Sales in August of this year was 4.83 million units and sales in September of last year was 4.28 million. Specifically focusing on single family homes also displayed a similar drop to 4.21 million in September from 4.29 in August. This indicates that the decline is not just with investment properties but primary living residences as well. Many experts do not believe the decline is due to people not wanting to buy homes, as more eligible people are attempting to buy now than in recent history. A decrease in supply of certain preferred neighborhoods and regions of the country and people waiting until certain parts of the year to buy are believed to contribute to the recent decline in home sales.

Condo and townhouse sales remained the same at slightly over half a million units being sold. Foreclosed homes saw a slight increase from the previous month. The number of available properties on the market has continued to decrease, not only from last month but from the previous year as well. This is a good sign and shows that more people who want to get properties sold, are actually getting them sold. The decrease in supply may also help explain the increase in home values and sales prices. Regionally, home sales followed the national trend except in the South, where the number of sales increased by half a percent from the previous month.

The median price for single family properties was $184,300 in September of 2012 and this is up from $165,400 a year ago. This is an increase of almost $20,000, 11.4 percent in just a year. Condos and townhouse sales prices are up as well with a 10 percent increase from the previous year. The shortage in housing supply is a main contributing factor to the higher values.

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