Doing the Charleston!

The national housing supply fell to a 2-year low last month, according to the National Association of Realtors®.

At the current sales pace, existing home inventories would sell out in 7.8 months -- 30 percent faster versus November 2008.

For a 10-month window, that's a major housing supply reduction and it helps to explain why multiple-offer situations have been so common lately.

Moreover, the same report from NAR showed sales activity reaching its highest point since July 2007, too.

If you're looking for evidence that the long-standing Buyers Market is ending, this month's Existing Home Sales report might be it. (See EXISTING HOMES SALES FOR MAJOR METRO AREAS below.)

Even median sales prices -- typically dragged lower by distressed and foreclosed properties -- declined at its slowest pace in a year.  The market may have turned a corner.

Home prices are rooted in the basic economics of supply and demand.

• When supply outweighs demand, home prices fall
• When supply lags demand, home price rise

Since March 2009, the market has been moving in the right direction.  Low mortgage rates, ample housing supply and a first-time home buyer tax credit fueled buy-side demand so that home prices are now rising in many U.S. markets.

If home supplies stay on this path into 2010, expect home prices to rise even more.

EXISTING HOMES SALES FOR MAJOR METRO AREAS

September Metro Area Existing Single-Family Home Sales and Prices  *All data reported herein is unadjusted for seasonality
		Median Price		% Change from 1 Year Ago
#	MSA	Sep-08	Sep-09	Price	Sales
1	Atlanta	143,700	125,600	-12.6%	-4.2%
2	Baltimore	263,700	247,900	-6.0%	10.6%
3	Boston	346,200	337,800	-2.4%	4.6%
4	Cincinnati	129,900	130,700	0.6%	12.0%
5	Dallas	143,100	144,500	1.0%	-5.7%
6	Houston	158,400	157,000	-0.9%	36.7%
7	Indianapolis	112,400	116,500	3.6%	-21.0%
8	Kansas City	139,700	140,100	0.3%	-2.5%
9	Miami/Ft. Lauderdale	274,700	217,200	-20.9%	70.4%
10	New Orleans	159,800	160,000	0.1%	39.3%
11	New York	424,000	383,800	-9.5%	13.9%
12	Philadelphia	231,800	216,800	-6.5%	18.4%
13	Phoenix	175,600	151,400	-13.8%	12.2%
14	Pittsburgh	115,900	119,900	3.5%	-1.1%
15	Portland	269,000	240,300	-10.7%	14.5%
16	San Antonio	148,600	147,900	-0.5%	-6.7%
17	San Diego	374,400	386,000	3.1%	-1.3%
18	St. Louis	132,500	136,700	3.2%	4.7%
19	Washington DC	301,600	307,100	1.8%	-3.4%
**NOTE:  There often are differences between this data and locally reported data because of differences in methodology, which may include the geographic coverage area, housing types, and Census benchmarking used in NAR’s model.  More importantly, there is a parallel between the percentage changes over time that is typically seen even when using different methodologies. ©2009 NATIONAL ASSOCIATION OF REALTORS®

Here is picture from my recent high school class reunion, held in Georgia on 10-10-09. One of my classmates told me when he was searching for the ballroom at the resort, and turned a corner to see a gathering outside in one of the corridors, he thought to himself "Who are all those old people?!" (LOL) We may look a little older, but we are still young at heart! We had a good time together.

We all attended North Habersham High School, which closed decades ago, when a new Habersham Central High School was built.  Now, even the old building has been torn down.  A few of those attending the reunioin won or purchased paperweights made of some of the demo material from the school, so our Alma Mater does still live on in some physical form - and will always live on in our hearts and minds.

Memories...from the corners of our minds...

The impending expiration of the first-time homebuyer’s credit has been front-and-center on many people's minds. Many have said chances are good the credit would be extended and that may be the case.

Senate negotiators reached a tentative deal to not only extend the current credit but to add a few bells and whistles: namely, a new credit of up to $6,500 (with income limits). The new credit would be available to all homebuyers who resided in their current residence for a consecutive five-year period in the past eight years (effectively excluding real estate investors). But it's not a done deal yet; a few House members have balked at the added costs.

Many property experts have cited the credit as the principal reason for the housing recovery, though that recovery was somewhat undercut by the September new-home sales, which dropped 3.6% to a 402,000-unit annual pace, substantially lower than the median forecast for 440,000 units.

Still, homebuilders could find comfort in the news that home prices continue to rise while inventory continues to fall. On the former, the median price of a new house rose 2.5% to $204,800 in September. On the latter, inventory shrunk to 251,000 houses, the fewest since November 1982. Based on the latest data, it should take only 7.5 months to sell all homes at the current sales pace.

Prices continue to firm across the housing spectrum, according to the closely watched S&P/Case-Shiller home-price index, which climbed 1% in August after posting a 1.2% increase in July. September's posting is worth anticipating; given that last week's data from Altos Research had home prices declining in September (Case-Shiller's data were for August). With any luck, the Altos data was an aberration.

Here are the economic reports due out his week:

Information above courtesy of Melissa Breeland with Residential Mortgage of SC