Home Sales Up Despite Sandy

Existing home sales edged up in October, rising a seasonally adjusted 2.1 percent despite limited impacts from Hurricane Sandy.

The National Association of Realtors (NAR) reported today that existing home sales in October were at an annual pace of 4.79 million, up from a downwardly revised 4.69 million in September. A figure of 5 million is generally considered to be the lower end of a healthy housing market.

Compared to one year ago, October’s sales represented a 10.9 percent increase over their Oct. 2011 level of 4.32 million.

Storm impacts not fully felt

Home sales were up in every part of the nation except the Northeast, which recorded a 1.7 percent decline. However, the impact of the storm was relatively minor, according to NAR chief economist Lawrence Yun, who said that most transactions for the month were already completed by the time the storm hit.

Yun said more substantial impacts from Hurricane Sandy were expected in the Northeast housing markets in the coming months, with sales delayed in many storm-affected regions.

In other regions of the country, existing home sales were up 4.4 percent in the West, 2.1 percent in the South and 1.8 percent in the Midwest for the month of October. On an annual basis, the Midwest is showing the strongest gains, with home sales up 18.1 percent from Oct. 2011, while in the weakest annual gains are seen in the West, where sales have increased only 3.5 percent over the past 12 months.

Prices up 8 months straight

Meanwhile, the median sales price for existing homes of all types rose for the eighth consecutive month, to $178,600. That’s the longest streak of consecutive monthly increases since 2005-06 and represents an 11.1 percent annual increase from Oct. 2011.

That rise in home prices is benefiting underwater homeowners, according to Yun.

"Rising home prices have already resulted in a $760 billion growth in home equity during the past year," Yun said. "Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year."

Distressed homes one in four sales

Just under one-quarter of all home sales were distressed properties, equally divided between foreclosures and short sales. According to NAR figures, foreclosures sold at an average discount of 20 percent compared to a normal transaction, while short sales sold at a 14 percent discount.

The inventory of homes for sale has been shrinking and currently stands at 2.14 million units, which represents a 5.4 month supply at current sales rates.

First published on MortgageLoan.com at: http://www.mortgageloan.com/home-sales-despite-sandy-9299

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