October 5, 2010 6:45 pm
A big part of existing home sales in the U.S. for August 2010 was accounted for by repossessed properties and distressed residences. According to the National Association of Realtors, the market for existing residential properties posted increased sales for the month with an estimated 7.6% rise compared with previous month's data.
With the number of bank owned homes for sale reaching record levels in the country, the rise in existing residential sales is a welcome sight for builders, realtors and other members of the real estate industry. However, sales activity for the month is still below desirable levels, with August 2010 sales representing a decline of 19% when compared with August 2009.
Although the rise in existing home sales is seen as a positive development, majority of consumers are still worried about the status of the housing market, particularly with home prices remaining low, distressed properties continuing to rise and job losses not showing any sign of improvement.
Analysts have stated that despite some major areas gaining ground in terms of home prices, the continuous expansion of listings of houses at auctions and the overall economic downturn are making buyers, sellers and ordinary Americans worried about the status of the housing market and the economy in general.
According to housing market observers, concerns about the market are justified despite the rise in existing home sales, particularly when a big part of these sales was accounted for by foreclosures and repossessed properties. August numbers showed that 34% of the total sales are for distressed residences, representing a 2% increase from a month ago.
Meanwhile, prices of homes also remain at record lows, with the average price for an existing dwelling pegged at $178,600 during the month in focus. This is considerably lower than the July average price for similar dwellings which was $204,000. One good thing about all these is that majority of analysts agreed that sales numbers will not be getting any worse in the coming months.
According to them, the home selling market has reached bottom and is climbing out of it, although in a very slow pace. However, they also reveal that the recovery of the housing market will depend, not just on the number of repossessed properties and foreclosures, but also on the performance of the labor market.