Existing Home Sales Rise For Third Time in Four Months

• February 22, 2012
• 4 Comments

by UrbanTurf Staff

The National Association of Realtors today announced that existing home sales across the country rose 4.3 percent between December 2011 and January 2012. Today’s news marks the third month in the past four months in which existing sales increased.

Unlike the pending sales index, which measures homes that have gone under contract but not yet closed, existing home sales consist of completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

By region, sales rose 1 percent in the Midwest, 3.4 percent in the Northeast, 8.8 percent in the West and 3.5 percent in the South, where DC is located. Compared to January 2011, existing sales were up 0.7 percent nationally.

Unlike pending sales numbers, where contracts could fall through before the settlement date, today’s statistics can be seen as good news for the housing market considering that they track home sales that have closed.

This article originally published at http://dc.urbanturf.com/articles/blog/existing_home_sales_rise_for_third_time/5178

4 Comments

1. Todd said at 9:45 pm on Wednesday February 22, 2012:
   This is a complete joke. The NAR also revised their December sales from +5% to -.5%. This is the only reason January beat expectations. If not for this revision the January numbers were a HUGE miss. Not to mention December expectations were for +5.2%. Imagine if the real number would have hit the market. That is two months of huge misses. The fact is NAR, the White House, and many more are trying to paint the picture of an improving economy. Things are very bad and the economy is about to fall off a cliff. Home prices will get crushed as interest rates rise. Increases in income will never offset the forthcoming rise in rates putting huge downward pressure on home prices. Rent and own physical gold. It is the only logical play.

1. JP said at 10:17 pm on Wednesday February 22, 2012:
   Todd, I bet you were the guy buying stocks in 1999 and then flipping houses in 2006. A 1 bedroom apartment in downtown Washington,DC rents for $2400 a month. The same condo is on the market for $325K. You go ahead and pay $2400 for rent while I pay a $1800 mortgage and enjoy all of the tax benefits of being a home owner. Let's get back together in 7 years and see who has more money in the bank after I sell the same condo at the correct market price of $475K.

1. Todd said at 4:31 am on Thursday February 23, 2012:
   JP, Right off the bat you are making personal attacks which tells me you are emotionally tied to your housing decision. I will address your claims and then prove my point with logic: 1) I am 32 so in 1999 I was still in college. It is possible that if I had money I would have invested in stocks but since I was a poor college kid I guess we will never know. 2) I was not flipping houses in 2006. In 2003, I purchased a home and within two years my home value had increased by 70%. In hindsight, I should have realized prices were unsustainable and sold quickly. I was a year or so late and luckily still sold for a nice profit (although lower than the high mark considerably). Now on to your rent vs. buy analysis. There is one 1BR condo on the market in my area. It is listed at $324,900. It has a condo fee of $613 and taxes of approx $200 a month. Assuming a 10% down payment your P&I would be $1,400 at a 30 yr. @ 4%. This means your total payment would be $2,213 and the payment after tax effect would be $1,819 in addition approx $320 of your payment is paying down principal so lets say your rent comparable cost is $1,500 take into account the $32,940 you had to put down on the property, most likely PMI required by your loan and you are now at 1750 or more rent Comparable. On apartments.com there are several available 1 BR apartments, same 725 sq. ft. size for $1,700. So by my calculation which is admittedly rough but also does not include maintenance on the home, closing costs, and the 6% commission you will have to pay to sell your home. I would say renting is at least equal to if not cheaper than owning. In addition to all of this you have complete flexibility when renting. You can break your lease at virtually anytime and move when ever you want. In the next post I will further explain the risk of owning a home in the current environement. Keep in mind this is only my view and I have been wrong before so take it with a grain of salt.

1. Todd said at 4:58 am on Thursday February 23, 2012:
   Following up on my previous post: Rents in DC are artificially high for one huge reason: 1) Lack of supply: During the housing boom everyone was turning apartment buildings to condos. In addition, very little new apartment supply was being produced because anyone and everyone could own a home. When the recession hit less people could qualify to purchase a house and all the people who were foreclosed on or sold there home through a short sale were forced to rent. In addition at first there was a liquidity freeze therefore new apartment buildings couldn't be built to meet demand. This has caused rents to be artificially high. But have no fear once liquidity came back to the market everyone and their mother began building apartments. The lack of supply will over correct itself as there are a billion apartments delivering in 2012 and 2013. This will ease the upward rent pressure and possibly even cause rents to fall a bit. Home prices are artificially propped up by low interest rates. Housing prices are being held up by extremely low interest rates. What seems like a great deal is a fraud. When people buy houses the first thing they identify is what they can afford. They do this by backing into the amount of house they can afford by looking at the monthly payment. When interest rates rise one of two things can happen: 1) Personal incomes can rise at the same rate thus equalizing the effect of the rise in interest rates and house prices will be unaffected. 2) House prices will drop dramatically to offset the increase in rates. Interest rates are currently around 4% if rates move to 6% (well below the historical average) you have increased your loan payment by over 25%. With unemployment where it is I don't see incomes rising drastically anytime soon. Therefore there is only one thing to happen home prices will continue their decline. Interest rates may stay low for a while but with inflation starting to rear its ugly head eventually rates will go up. Add to that potential gov't cuts and the fact DC prices really didnt drop much (comparing to the rest of the nation) and DC is one of the last places I want to own a home. I would love to hear other views. As I said this is just my take. Current the risk/reward to owning a home is way out of line for me.