Home Sales Set A Record Again Prices Up Almost 15% |
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Existing home sales set another record in the third quarter of 2005, and prices jumped nearly 15%, but even the National Association of Realtors in its report Tuesday said the housing market will probably begin cooling after its five-year boom. Sales of single-family homes and condos rose to a 7.24-million annual pace in the July-September quarter, up 6.5% from a year earlier. At the same time, 69 of the 147 metropolitan areas studied had double-digit price gains, as the median price of a single-family home climbed 14.7%, year-over-year, to $215,900. That means half the homes that sold nationwide went for more than that, half for less. David Lereah, the Realtor's chief economist, predicts the heady gains will cool as interest rates rise. "We're fairly confident that third-quarter home sales will prove to be the high point of the five-year housing boom," Lereah says. There are scattered signs that the housing market has already begun to slow. Interest rates on 30-year fixed-rate mortgages are now running about 6.3%, compared with 5.89% in the third quarter. The inventory of new and existing homes on the market is rising. Still, DataQuick Information Services released a report Tuesday showing Southern California's housing market remained strong in October. A total of 28,489 homes were sold during the month -- a roughly 10% drop from September, but a 1% gain from a year ago. "The big question is still whether ... the real estate market will end this cycle with a crash or with a soft landing," says DataQuick President Marshall Prentice, calling the latter outcome more likely. The NAR said Phoenix had the most robust price gains in the third quarter of 2005: The median home price soared 55.2% to $268,000 from the same period in 2004. In Orlando, home prices rose 44.8% to a median $261,300, while Cape Coral-Fort Myers, Fla., saw a 42.5% price gain to $277,600. Median prices ranged from $72,800 in Danville, Ill., to $721,900 in San Francisco. Elmira, N.Y., and Decatur, Ill., were also among the least expensive markets, while Anaheim, Calif., Honolulu and San Diego ranked with San Francisco as the priciest. Six areas had small price drops during the period, though the Realtors said the weakness was concentrated in lower-priced cities with large inventories of unsold homes, a weak job market or both. The housing market has been a main economic driver, buoying the job market and boosting consumer spending as owners have extracted hundreds of billions in equity. High Frequency Economics says that even a slowdown to more traditional rates of home construction could shave 2 percentage points off annual economic growth, now running at a 3.8% pace. | ||||||
| Last Updated ( Wednesday, 29 April 2009 ) | ||||||
