Sales of Existing Homes Improves

~”This clearly is a rush of first-time homebuyers”~

Nationally, the sales of existing-homes rose again in November as first-time buyers rushed to close sales before the original November 30 deadline for the recently extended and expanded tax credit, according to the National Association of Realtors®.

Existing home sales, including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate¹ of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

In Lee County we saw the same trend. The median price of a single-family home sold with the assistance of a Realtor jumped 3.8 percent from $91,600 in October to $95,100 in November while the number of sales increased 8.3 percent from 1,413 to 1,530, according to statistics released Tuesday by the Florida Association of Realtors.

Compared with a year ago, the number of houses was more than double the 656 sold in November 2008. The median price, however, was down 13 percent from November 2008’s $109,900.

Lawrence Tun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

An NAR practitioner survey² shows first-time buyers purchased 51 percent of homes in November, compared with an upwardly revised 50 percent of transactions in October.

According to Freddie Mac, the national average committment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008. Last month’s mortgage interest rate was the second lowest on record after bottoming at 4.81 percent in April 2009.