Sales of U.S. Existing Homes Rise to Highest Since 2009

[Purveyor]

Source: Bloomberg

By Victoria Stilwell - Aug 21, 2013

Sales of previously owned U.S. homes climbed more than forecast in July to the fastest pace since November 2009 as more buyers entered the market before further increases in mortgage rates.

Purchases of previously owned houses advanced 6.5 percent to a 5.39 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The median forecast of 76 economists surveyed by Bloomberg projected a 5.15 million pace. Prices increased 13.7 percent from a year earlier, the most since October 2005.

Higher property values that allow more Americans to list their homes, job gains and still-historically low mortgage rates are underpinning demand. At the same time, bigger increases in borrowing costs threaten to slow the pace of improvement in housing, which has been mainstay of economic growth.

“Housing will be an important part of the recovery through the rest of this year and into 2014,” said Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh. PNC is the most accurate forecaster of existing-home sales over the past two years, according to data compiled by Bloomberg. “We have a better labor market and improved confidence, so the underlying demand is there.”

Read more: http://www.bloomberg.com/news/2013-08-21/sales-of-u-s-existing-homes-rise-to-highest-since-2009.html

[uh clem]

1. I would..

...like to know exactly who the buyers are. I saw an article not too long ago that said that banks are buying up houses and setting up management companies to rent them out.

[tomm2thumbs]

2. Buying up to rent out is what I hear from properties sold in my neighborhood

In the hopes of selling for a big profit in a year or so after prices rise another 11-13 percent

They can hope, can't they? lol

[frazzled]

3. If personal anecdotal evidence is worth anything

I was getting really worried about our building (40 condo units). Starting with the recession, people weren't selling anything, at any price, and were forced to rent or not move. The people in the unit next to us got a job in a different city and, not being able to sell, rented it out for 2 years. The people on the other side of us were finally wanting to move to a house because their two young boys were getting older (5 and 7) and they wanted a house and yard. Their unit wasn't selling for two years. Now both those units are sold plus another on our floor. Nice young couples, one just had a baby. So I am feeling that the young professionals, at least, are starting to buy.

But again, that's just an anecdote from one floor of one building in one city. But it's looking more hopeful here, at least.

[dixiegrrrrl]

4. You are correct.

On yesterday's Keiser Report, a guest reported he had checked the number of house sales against the number of mortgages applied for, and found sales outstripped mortgages by a very very large margin.
Meaning, the banks are using all the free taxpayer cash to buy up houses for rentals.
Plus, according to an article in the SF Chronicle, regular buyers are reporting they have been outbid for
houses by buyers who use all cash AND bid up the price to ABOVE the asking price, often by thousands of dollars.

[ColumbusLib]

5. Here in central Ohio

Houses are selling like hotcakes! It's a seller's market.

[happyslug]

6. 2009? Peak sales was in 2005 and sales dropped every year afterward.

http://www.census.gov/compendia/statab/2012/tables/12s0977.pdf


1998. . . . . . . . 4,495.000
1999. . . . . . . . 4,649.000
2000. . . . . . . . 4,603.000
2001. . . . . . . . 4,735.000
2002. . . . . . . . 4,974.000
2003. . . . . . . . 5,446.000
2004. . . . . . . . 5,958.000
2005. . . . . . . . 6,180.000
2006. . . . . . . . 5,677.000
2007. . . . . . . . 4,939.000
2008. . . . . . . . 4,350.000
2009. . . . . . . . 4,566.000
2010. . . . . . . . 4,308.000

Given peak year was 2006, the 2009 level was just above the sales level in 1998. 2009 sales were still 26% below peak sales. Another example of "Figures don't lie, but liars Figure"

Please note the above are the ANNUAL figure, not a monthly sales figure "adjusted" to an annual rate. The above reflect what was SOLD in a year, not what would be sold if sales in July had been the same from January to December.

The problem is we are at the END of the annual selling season. Yes, people buy homes in December and January, but the big time is May through August. Sales drop but stays up in September, but then drop like a rock. People buy new homes to move into during the summer, for it is during the Summer they can move themselves AND THEIR CHILDREN, without the Children having the adjust in the middle of a School Year.

July has always been a peak month for sales of homes. In the South there is a tendency for Summer Vacation to end at the BEGINNING of August, so people want to move BEFORE August. People will look for housing the rest of the year, and most will not buy till May through August (With some early buying in March and April).

In the North, most schools start just before Labor Day, this also reduces sales in August compared to July. In many ways, June and May are preferred to August, for most families can wait to move their families in the summer if they have a house, but they can NOT move their families if they have no home to move to (i.e. July, August and September tend to have a lot more "I have to buy something, and this is good enough" then earlier or later sales in a calendar year).

The next big issue, is this sale rate sustainable? I doubt it. The reports I have read, indicate a good summer sale rate (mostly to parents who have move) but a reduction after that date as people without children demands reduction in price. Remember, most of the people NOT buying in the summer, generally can wait unlike parents with Children who has to get those children in school before the start of school.

[Kingofalldems]

7. Nice