This morning brought news that existing home sales rose 10.1 percent in October, which the National Association of Realtors quickly attributed to the now-extended deadline for the home buyers’ tax credit.
Sales activity nationally is at its highest point since February 2007, which means the nation’s catching up with the three-plus year highs in closed sales we’d been seeing locally in the Phoenix real estate market since the spring.
Is this good news? Probably. Does it impact those sellers who for whatever reason (okay, it’s probably the price) who haven’t been able to compete with foreclosures and short sales over the past several months? Not really.
This news came on the heels of last week’s report that new home starts and sales were down significantly. I can’t imagine this was a surprise to anyone, given the overbuilding that helped lead us to where we are today.
So was that report good or bad news? If you are a builder, bad. If you believe new home starts are a key component in getting the economy back on track, it’s probably bad. But if you’re a seller who doesn’t have to worry about competing with new homes, or if you’re a real estate agent with resale inventory to move, it’s a good thing. Admitting it, though, is like playing the Don’t Pass line at a craps table in Las Vegas – it’s the right thing to do, but no one likes you very much for playing the contrarian.
Taking a step back, do you feel any real connection to the economic news that continues to come out? The recession is past yet unemployment remains high. The housing market is showing signs of recovery yet values haven’t followed suit. The Dow Jones Industrial Average is at a 13-month high and many of us are searching in the cushions of our couch to help pay for those Chanukah and Christmas gifts.
What I’ve said forever about real estate now applies more than ever to the economy as a whole – everything is in the eye of the beholder. There’s no such thing as a good or bad real estate market, there’s just the market and different people who are in different circumstances are going to view it, well, differently.
Rising existing home sales could eventually cause all boats to rise if only because that could lead to a much-needed boost in confidence. Half of the economic issues we have today seem to be 80 percent mental – confidence could improve consumer spending, which then could spur companies to hire, though it’s hard to spend what you don’t have and any purchase seems almost to be a leap of faith.
Does anyone else feel similarly? I’d like to know.[tags]Phoenix real estate[/tags]