Copy for Real Estate Guide Column for 9-4-09

REAL ESTATE PATTERNS
By Ken DuVall

UP, UP & AWAY!

Nationally, existing home prices have risen for the 2nd month in a row, up 1.4% per Case-Schiller. Sales of existing homes are also up 5% from their year-ago levels. I don’t quote C-S often as they only use 20 metros (Chico is one of them), not the rest of America. But they report prices rising in 18 of the 20 cities in June. Robert Shiller’s the perennial pessimist. If he’s upbeat, it’s good news.

For the 2nd quarter overall, the C-S price index rose 2.9%, their very first quarterly increase in 3 years for a striking turnaround. Home prices have bottomed for the time being. Prices actually rose .5% in May over April, a very positive indicator. A lot of what follows has been in the news but here’s the big picture this week.

California existing home sales increased 12% in July compared with a year ago. Closed sales totaled 553,910 in July at a seasonally adjusted annualized rate. The July 2009 median price rose 4%. July marked the 6th consecutive month of median price increases. Clearly, our market is on the comeback trail. This was the first time in 5 years that existing home sales posted consecutive monthly increases, a significant factor. Sales are also up 5% from their year-ago levels, which is the first time since February 2006 that sales have not recorded an annual decline. Existing home sales increased 6.5% from last month.

More positive news: U.S. new home sales jumped 9.6% in July, for a 6th straight monthly gain, the longest streak on record. Existing home sales also rose 3.2%, which is 12% over July 2008. The Commerce Department reports home sales rose to a seasonally adjusted annual rate of 433,000, up from June’s rate of 395,000. By comparison, in 2008, 485,000 new homes sold. In 2007, it was a whopping 776,000. The median sales price of $210,100 was down just 11% from $237,300 a year earlier.

This July, the seasonally adjusted U.S. new home sales rate was the highest since last September. These consecutive monthly increases add to the growing body of evidence that the housing market is expanding again. July sales are up 31.6% from the January 2009 bottom.

Meanwhile, inventories of unsold U.S. new homes fell 3.2%, to the lowest in 16 years. On balance, builders have pulled back on new starts too. Yet, a 7 month supply at the July sales rate is the lowest in 2 years, which is good. At the current sales pace, there’s only a 9 months’ supply of existing homes on the market, the lowest level since last December. I think things are looking good. Timing and attitude are everything! Keep the Faith. See ya in 2 weeks.

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings and all my columns at www.KenDuVall.com. Call Ken at 345-3700 for all your real estate needs. Free consulting.