The National Association of Realtore (NAR) today released a report on sales of existing homes in October.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate1 of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
Lawrence Yun, NAR chief economist, was surprised at the size of the gain.
I won't go into an analysis of why it's not surprising that NAR's economist was surprised, I leave that to his fans. I will note, however, that it's only in paragraph 10 of a 19 paragraph report that NAR mentions that prices are down.
The national median existing-home price3 for all housing types was $173,100 in October, down 7.1 percent from October 2008. Distressed properties, which accounted for 30 percent of sales in October, continue to downwardly distort the median price because they usually sell at a discount relative to traditional homes in the same area.
The second sentence is an excellent example of a "blinding flash of the obvious". But, moving on, so of the 500,000 homes that sold in October, 150,000 of those sales were distressed properties? Why am I reminded of the line "we lose money on every sale but we make it up on volume"?