Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.

Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”

Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.

Here’s the region-by-region picture:

• Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
• Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
• South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
• West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

This month’s event (27 October) at the Olde Brogue in Great Falls will be sponsoring the Yellow Ribbon Fund.  As you have likely noticed, we have moved towards supporting our country’s service men and women and will look to do so until the war on terror has been brought under control.  Last month’s dinner raised approximately $3500 for Operation Second Chance.  Both these organizations have their own unique way of assisting our injured veterans.  In addition to helping our service men and women, Yellow Ribbon Fund, also provides support to the husbands, wives and other caregivers.  Please come out and show your support.  I have again invited approximately 15 veterans (This Country’s True Heroes) to join us.  As with last month, let me know if you would like to contribute the $25 minimum to reserve the privilege of buying dinner for one of our vets.  I was thrilled with the overwhelming response to this last month with several folks going way beyond the minimum.  Whether you sign up to buy a vet dinner or not, your presence goes a long way towards helping raise funds for the organization and showing that we all care.

We are again doing two seatings (5:30 and 7:30) to accommodate the overwhelming response we have had to the last three events.  Please be sure to make a reservation early since the Snuggery portion of the Old Brogue filled up for both seatings.  Call the Brogue at (703) 759-3309 to do so. Invite you friends and let’s try to fill the entire restaurant this time around!!  The only cost to you is your dinner.

I do want to let everyone know that in addition to my regular sponsors, Adeler Jewelers in Great Falls has signed on to provide a door prize valued at approximately $200 for this and future events.  Thank you Jorge Adeler.

As always, please be sure to support the Charity Tuesdays Co-sponsors:

The Old Brogue
James Gaudiosi – Wells Fargo Home Mortgage
Kevin Shiner – Shiner Roofing and Siding
Danny Ott – Wells Fargo Home Mortgage
Chris Melnick – LSA Title Services
Gary Kaihara, DDS

and our door prize donors:

Northern Virginia: September 2009
The Northern Virginia Association of Realtors® reports on September 2009 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
 
A total of 1,684 homes sold in September 2009, a 2.06 percent increase above September 2008 home sales of 1,650.
 
Active listings decreased by 24.40 percent from last year, with 6,889 active listings in September, compared with 9,112 homes available in September 2008. The average days on market (DOM) for homes in September 2009 decreased by 32.26 percent to 63 days, compared with 93 days in September 2008.
 
Sales prices peaked compared to those realized last year. The average sales price in September increased by 4.94 percent from September 2008, to $427,881, compared with last September’s average of $407,748.
 
The median price of homes sold in Northern Virginia rose in September to $375,000, which is an increase of 7.68 percent compared with September 2008′s median price of $348,250.
 
The number of pending home sales in Northern Virginia in September shows an increase of 13.22 percent at 2,012 compared to 1,777 in September 2008.

 
Greater Northern Virginia: September 2009
Sales activity in Greater Northern Virginia (NVAR jurisdictions plus Prince William, Loudoun and the Greater Piedmont counties) for September 2009 shows a decrease from September 2008.
 
The number of Greater Northern Virginia region homes sold in September was 2,961, an 11.88 percent decrease from September 2008′s total of 3,360 sales. Pending home sales showed a slight increase of less than one percent from September 2008′s 3,741 to 3,770 in September 2009.
 
The average sales price of $366,798 in September 2009 increased by 10.21 percent over September 2008′s average sales price of $332,803.
 
Across Greater Northern Virginia, the number of listings showed a decrease from 2008 numbers, with 13,666 listings active, which is 28.45 percent less than this time last year, when 19,100 homes were available. The average DOM for a home sold in September 2009 was 62 compared with last year’s 101 DOM, a decrease of 38.82 percent.

As anyone who has worked with me knows, I have avoided getting involved with short sales.  The prospect of having a short sale agreed to by banks was typically a long involved one that often ended in frustration for the buyer, seller and  yes the realtor.  One of my recent clients can personally attest to this.  Jen had put an offer in on a property in February.  She was still waiting to hear back from the bank in September when she and I first met.  Jen had fully expected to be settled into her new home by now.  In the interim, prices had started to go back up due to our strengthening local market.  Fortunately, when we began looking at homes, I didn’t have to give Jen my anti-short sale  discussion.  She already understood!  Within about 2-3 weeks of searching, we found what she was looking for in a home, ratified a contract and will be settled before the end of October.  Congrats!!

Now the banks are apparently going to make it even harder to get approval for a short sale.  The following article appeared in Weekly Real Estate News.  Just remember the old adage, “If its too good to be true, it probably is.”

Daily Real Estate News  |  October 9, 2009  |   Share

Banks Making Short Sales Tougher
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

“It drives me up a wall,” says Robert G. Hertzog of Summit Home Consultants in Phoenix. “[The bank is] holding my client hostage.”

Source: BusinessWeek, Christopher Palmeri (10/09/2009)