According to a report put out by the National Association of REALTORS, home sales are down in 45 states (including the District of Columbia) on a year over year basis from the first quarter of 2008 to the first quarter of 2009.
Only six states showed increases in home sales this pat year, you can probably guess four of them; California (80.6%), Florida (25%), Arizona (50.2%), and Nevada (116.8%). The other two were Minnesota (11.9%) and Virginia (12.2%).
Regionally, home sales were down in the Northeast by -20.1%, the Midwest by -13.1%, and the South by -12.7%. Home sales were up in the West by 24.3%.
This data tells us two things, first, all real estate is local, we know this, and most local markets are in trouble right now. But second, and more important, it appears as though that falling home prices, not low mortgage rates nor first time home buyer tax credits, are the only factor that is spurring home sales.
The precipitous declines in home values that we have seen in California, Florida, Arizona, and Nevada, are a direct result of foreclosures. So while home sales have surged in these states, just as many homeowners have lost their homes and even more homeowners now find themselves further under water with their mortgage, creating zombie homeowners. Additionally, banks are negatively impacted and credit markets are strained.
The big picture is that while lower mortgage rates and the first time home buyer tax credit may be "saving" home sales, it is not creating them. Plunging home values are the only "stimulus" creating home sales right now.
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