Impacted by normal seasonal drops in sales, an unpredictable foreclosure moratorium and an expired Tax Credit, residential home sales were lower again in October. A monthly survey of 54 metropolitan areas indicates that sales were 9.8 percent below those in September and 30.2 percent below sales in October 2009. The inventory of homes on the market continues to fall, and prices remain little changed.
“It’s understandable that sales are lower than the same time last year since the data was artificially inflated in October 2009 by homebuyers rushing to take advantage of the first tax credit,” says Margaret Kelly, CEO of RE/MAX. “We’re pleased that despite all the market swings, home prices have remained stable and through the winter months we’re looking for a return to a normal seasonal pattern, with a pickup in activity next spring.”
With a 9.8 percent drop in sales transactions from September, October activity appeared to be in line with the usual summer-to-fall selling pattern. October 2009 sales were nearly 20 percent higher than the previous year due to the First Time Homebuyer Tax Credit. With the Tax Credit impacting historical sales patterns, it is difficult to objectively view the 30.2 percent drop from October last year. In the survey’s 54 metro areas, only one reported higher sales from a year ago. Burlington, VT reported sales at a rate 59.3 percent higher than last October.
While most analysts have been predicting a drop in home prices, the October RE/MAX Housing Report indicates that prices have remained stable, only fractionally down from October 2009 at 0.68 percent. Of the 54 cities surveyed for this report, 35 showed price increases from last year, 18 were lower and only Charlotte, NC remained unchanged. The top five markets with price increases were Pittsburgh, PA +10.3 percent, Nashville, TN +8.2 percent, San Francisco, CA +8.0 percent, Providence, RI +7.1 percent and Hartford, CT +6.6 percent.
For the homes that sold in the survey’s 54 metro areas, the average number of days it took from listing to signed contract was 91, which is just 3 days longer than the 88 day average reported last month and also 5 days longer than the 86 day average in October one year ago.
The inventory of homes on the market in October dropped 5.7 percent from September, but is just 1.1 percent below the mark of October 2009. Based on sales contracts signed in October, the Months Supply of Inventory in the survey’s 54 cities, was 9.7, which is slightly lower than the 9.8 supply reported in September, but still higher than the 6.9 month supply in October 2009. The Months Supply of Inventory has remained in the 9 month range for July, August, September and October of this year. A six month supply is considered a market that is balanced equally between buyers and sellers.