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Is the unexpected rise in home "SALES" good news??

By
Real Estate Agent with wexzilla.com

 

Earlier today, the National Association of Realtors (NAR) announced , ....


December Existing Home Sales Rise Unexpectedly-  The NAR says sales of existing homes rose 6.5 percent from November to December, closing out the worst year for the U.S. real estate market in more than a decade.

The National Association of Realtors said Monday that sales of existing homes rose to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.

 

The question I ask , "Is this Good News"

I , personally, am quite concerned. I know, I know, I am crazy, right??  I mean more home buyers is good news. We need the multitude of short sales, bank owned homes and resale homes and the general over-supply of real estate reduced before we can hit a bootom, build a base and move in the direction of a recovery.

HOWEVER, we also need a sopt, a firm stop in declining home prices. Our collective (american homeonwer) net worth is tied up in our homes. The lending and credit markets willingness to lend money is tied to the flattening of home prices.

If we cannot get a stop in this accelarating drop in home prices. We will Never (I am slightly exaggerating) see the end to the economic recession.

Personally, I would have rather seen the expected report in existing home sales. Not the unexpected percentage rise.The huge drop in prices (think California - 38%!!! in 2008 alone!!) causing this is not good news!!


Let me know what you think.

Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

I missed the article - A rise in home prices or number of home sales?

Jan 26, 2009 02:23 AM
Scott Skinner
Liberty One Lending - Tempe, AZ

james, great point, I dont think this is good news at all. we will see tightening of the little credit that is left if home prices do not stablize

Jan 26, 2009 05:09 AM
Eric Murrietta
Homeowners Financial Group USA, LLC - Scottsdale, AZ

I think you meant the rise in home sales which has been caused by the falling home prices.  I could be wrong. Nonetheless, it is important that prices stop declining.  THe farther they fall the more and more there are people who are upside down and then finding it harder to get out from the mortgage they are under.  The psyche is a very interesting thing.  Home prices fall, people feel trapped because they can't get out of their mortgage, so they contemplate walking away.  Home prices continue to fall and they discuss walking away.  Home prices continue to fall and they walk away.  Everyone has their breaking point and perhaps the first group that walked away caused prices to fall and then the 2nd group caused prices to fall farther and now the 3rd group and again the prices fall but home sales increase.  But now there is the fourth wave of people.  I agree, the decline needs to stop or we must settle in for the long haul. 

Jan 26, 2009 05:38 AM
James Wexler
wexzilla.com - Scottsdale, AZ

Bill G  - I have changed the incorrect Title

 

 

Eric - thanks for pointing the incorrect title

Jan 26, 2009 06:04 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Jim, I have mixed feelings about this... it seems like a reduction in inventory will eventually bring prices up?

Jan 26, 2009 07:57 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

I thought that might have been what you meant to say:)

Jan 26, 2009 08:20 AM
Rich Dansereau
Positive Real Estate Professionals - Knoxville, TN

I actually wrote an article (link will open in a new window) on this very report today, though I took the opposite approach and see it as positive. We can't always agree <<<smile>>>

Jan 26, 2009 11:21 AM