Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for October showing a continuation of the epic government sponsored surge in home sales activity particularly for condos and lower end properties.
In fact, the stimulative effects have been so pronounced that sales of single family homes were up over 21% annually while sales of condos jumped a whopping 40% over the same period.
As for prices, they are still declining with single family home prices declining at 6.8% annual rate while condos declined at a 10.4% annual rate.
It’s important when reflecting on the sales results to consider that 70% of all sales were for properties priced below $250,000 while only 7.7% were priced at or above $500,000.
Clearly, today’s results unequivocally indicate that the government’s tax gimmick drove a surge in demand, bringing a renewal of speculative animal spirits but the cost has been high with at least $500 million of outright fraud and an FHA that is on the rocks.
This is probably as good a time as any to reflect on the fact that without Realtor campaigning, carping and lobbying of federal representatives as well as publishing a constant flow of propaganda directed at first-time “homebuyers”, the misguided homebuyer tax gimmick would either have never existed or would have had much more limited effects.
So, while the Realtors have brought home the commission bacon to their independent Realtor constituents it will again be the typical American (current and future) that will be picking up tab for this new housing binge.
The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007, 2008 and 2009 as well as national existing home inventory and month supply.
Below is a chart consolidating all the year-over-year changes reported by NAR in their most recent report.