The recent figures in existing home sales shows a dramatic increase for November and realtors are hopeful that this trend will continue through the spring of 2010. This article tells why there is a sudden surge in real estate sales and discusses what the future may hold for the housing market.
The November figures for existing home sales is giving those in the real estate market something to smile about. For the third consecutive month, sales are up with the November sales rising 7.4% above the October sales. This surge in sales surpassed economists’ expectations.While some believe this is the turning point for the housing market, others are more hesitant to believe this growth with continue over the long haul.
Why the Increase?
The credit for November’s dramatic increase lies mainly in the rush of home buyers wanting to benefit from the first-time home buyer’s tax credit. A survey conducted by the National Association of Realtors showed that 51% of home sales in November were purchased by first-time home buyers. Interest rates and the current price of existing homes are also responsible for this upward trend in sales. The national average for a fixed-rate mortgage is currently 4.88% and the average home price is at $172,600. Distressed homes made up 33% of November’s sales, helping to lower the inventory of properties for sale.Realtors are hopeful that as the inventory of homes for sale decreases, they will see the downward trend of prices level out and the market will then begin to return to a normal appreciation pattern.
Looking Toward the Future of Home Sales
With the new extended home buyer tax credit continuing until the end of April, 2010, realtors are hopeful they will see a continuation of this upward trend in home sales. The new tax credit is expanded to include current home owners who are selling their home and buying a different property. Home sales should continue to be strong until the spring deadline and the hope is the market will see an increase through the rest of 2010. Approximately 4.4 million homeowners are expected to claim the home buyer tax credit and realtors believe that this will result in the market stabilizing in both inventory and home prices. However, the housing market’s continued growth is also dependent upon the overall economic conditions.
November’s surge in sales places a positive spin on the housing market that realtors have been looking for and the hope is this upward trend will continue. Although some in the industry feel that the market will grow slowly over the next few months, others are looking ahead to a continued growth in sales and the overall market conditions.
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