Friday, October 24, 2008

September 2008: first house sales increase since 2005

More existing homes were sold last month than had been sold a year earlier, the National Association of Realtors reported this morning. It’s the first such increase since late 2005. (An “existing home” is one that was previously owned by someone else — as opposed to a newly built home.)

This doesn’t mean the housing slump is over, or even close to being over. In fact, more than a third of last month’s home sales were part of a foreclosure process.

By many measures — like house prices relative to incomes — prices still have another 5 percent or 10 percent to fall, before they have reached a historically normal value. And it’s possible that they will overshoot their normal values, as prices often do in the aftermath of a bubble. (info from The New York Times)

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