As expected by most economists, existing-home sales declined in October according to data released today by the National Association of Realtors®. Thus, the resale home sales market reversed course from a strong gain in September. Economists surveyed by MarketWatch had expected sales to fall to 5 million homes, and, indeed, they fell by 4.98 million according to the report from the Realtors® association. This is down from 5.14 million homes reported sold in September, when there was a surprising uptick, and 1.6 percent below the 5.06 million-unit level in October of last year. The National Association of Realtors® estimates that 45% of the sales in October 2008 were bank or investor-owned -- in other words, homes which were on the market following foreclosure. The national median existing-home price for all housing types was $183,300 in October, down 11.3 percent from a year ago when the median was $206,700. The foreclosures are no doubt pressing this price median down. Homes in some parts of the country are being sold for less than replacement cost, according to NAR. Lawrence Yun, NAR chief economist, said consumer hesitation is understandable. “Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” he said. “We have favorable affordability conditions, but we need more than that to give buyers … the confidence they need.” The absorption rate (supply of homes divided by the number of sales during the last month) at the end of October was at 10.2-months, up slightly from a 10.0-month supply in September. A balanced market is 5-7 months supply – the national status still is “buyers’ market” – and it is the same in Flagstaff, were the absorption rate is actually quite a bit higher than nationally. See Flagstaff Real Estate Update for October. Some areas of the country had solid gains in units sold from one year ago, including areas of California and Florida, where prices have dropped more dramatically than in Flagstaff. Since these areas led us into the housing recession, perhaps they are leading us out. For information on the Flagstaff residential real estate market and how its trends apply to your personal real estate needs, contact Ann Heitland, Associate Broker at Team Heitland of RE/MAX Peak Properties. | 
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