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Existing Home Sales Up, New Home Sales Down

December 24th, 2009 categories: For Buyers, For Sellers, Lake Tahoe NV Statistics, Lake Tahoe Real Estate, Nevada Neighborhoods, South Lake Tahoe Statistics, Stateline, NV

Which Way is Up, that is Today’s Housing Question?

Well, it seems that housing sales are both up and down at the same time. At least that’s what it is today as it relates to new reports about existing home sales and new home sales. It’s a tale of two different kinds.

What we like about seemingly conflicting reports is it gives us pause to think. Why are existing home sales up? Why are new home sales off? What does this, if anything, mean to South Lake Tahoe?

All of that, and more, below.Existing Home Sales Up:

This comes to us from CNNMoney.com via the National Association of Realtors (NAR). Here’s a few bullet points to their article, "November Home Sales Leap":

Sales of existing homes jumped again in November.

"This clearly is a rush of first-time buyers not wanting to miss out on the tax credit," said NAR’s chief economist, Lawrence Yun.

November sales surprised the housing industry. The sales total was also a huge improvement over a year ago.

Also driving sales are exceptionally low interest rates (Avg. 30-year, fixed-rate loan is 4.88%, down from 6.09% a year ago. With rates that low, homebuyers save more than $150 a month on a $200,000 mortgage.)

Home sales will likely decline in December (They always do, but the new question is will larger numbers of homes come to market over the next few months: (1) bank owned homes not yet up for sale yet, and (2) more foreclosues due to a number of option-ARM mortgages set to default.

Prices will likely continue to decline, according to some economists. If so, more price declines could again alter public perception.

Many economists believe, as do we, that price declines are the "fix" the housing industry.

(article here)

New Home Sales:

This comes to us from Associated Press via the National Association of Home Builders (NAHB). Here’s a few bullet points to their article, "November New Home Sales Sink 11 Percent":

New home sales plunged unexpectedly last month to the lowest level since April.

11 percent indicates buyers are taking pause following an extension of the deadline for first-time buyers tax credits.

Chief economist at the National Association of Home Builders calls the results "pretty awful."

Results indicate how reliant housing market has been on government assistance. (Some 2 million homebuyers took advantage of first time home buyer tax credit.)

Despite the poor showing from new home buyers, the housing market has been recovering from the worst downturn in decades, largely due to a massive infusion of federal assistance.

(article here)

What it means to South Lake Tahoe:

Recent reports show signs of increased demand on both sides of our state line (California here, Nevada here)

Because or our resorts environmental controls, there are few new homes built in any given year on both sides of our state line.

California new home sales chart here, Nevada chart here (Check it out, gives detail about what we mean that new home sales have little effect on our market)