Existing Homes Sales Rise, but at a cost
Existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.
Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”
To read the full story, go here: http://www.realtor.org/press_room/news_releases/2012/02/ehs_jan
What the story underplays however is that there was a cost to the rise in home sales and before you conclude I’m just a “Negative Nancy”, there may just be a silver lining to all of this. The cost is clear as evidenced by these charts. Home sales rose because prices have been dropping and as a result of lower prices, demand increased. Economists call this “elasticity of demand” and it appears that the real estate market is highly elastic as small changes in prices caused huge changes in demand. The National Association of Realtors reported that while prices are down in the “West” about 1.8%, home sales rose 8.8%
You’ve heard me often say that real estate is all local and you would be right to say “so what” to what’s happening on a national or even regional basis. Keep reading below to see the charts on price and home sale volume for the South Bay.
Meanwhile, thank you for reading your latest newsletter and when you come across someone looking to buy or sell real estate here in Palos Verdes or around the South Bay, take out your cell phone and text or call me!
At Your Service,
Feb. 23, 2012
Tagged with: home sale trends in palos verdes, palos, palos verdes, palos verdes real estate, palos verdes real estate trends, palos verdes sale price trends, real, real estate, sale price trends in palos verdes, verdes
Blog by George Fotion
Palos Verdes Estates, California
Information on Palos Verdes homes for sale and South Bay homes for sale