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Data Show Housing Market Starting To Brighten
STEVE INSKEEP: On a Friday morning, it's MORNING EDITION from NPR News. I'm Steve Inskeep.
One piece of positive economic news has emerged in an otherwise anxious week. The National Association of Realtors says sales of existing homes rose almost 19 percent over August of last year. It's more than what was expected, although it stops short of a real turn around, as NPR's Tovia Smith reports.
TOVIA SMITH: A year ago, August sales were at the lowest level in decade. Gut-wrenching, one analyst called it. So no surprise that even a little boost now would give those on the front lines of real estate an extra spring in their step.
UNIDENTIFIED WOMAN: Hi.
(SOUNDBITE OF LAUGHTER)
UNIDENTIFIED WOMAN: This is Debra Berman.
DEBRA BERMAN: Hi, Debra Berman.
UNIDENTIFIED WOMAN: Hi, Debra. Nice to meet you.
SMITH: In west Los Angles, veteran realtor Debra Berman shows a three bedroom, three bath to a young couple.
BERMAN: All right. So as you see this, this has got tons of light. And this is the hub of the house right here.
SMITH: Homes sales in the west saw the nation's biggest monthly jump - up 18 percent. Berman says she's definitely seen it, for example, in one development where 16 properties have been sitting stagnant for months.
BERMAN: In the last 10 days, three of them have gone under contract. It's huge.
SMITH: Less encouraging, however, is that August also saw prices in the western U.S. fall dramatically. This home is listed at nearly 30 percent less than what it sold for a few years ago. In the region overall, prices were down 13 percent, more than twice the national average.
Economist Jed Smith, with the National Association of Realtors, blames an increase in sales of distressed properties.
JED SMITH: There've been a lot of foreclosures and short sales. And investors seem to have come into the market in recent months to purchase some of those. And so, while it's unfortunate, nonetheless it's getting cleared off the market and setting a base for better behavior in the future.
SMITH: Smith says the inventory glut is beginning to dwindle to healthier levels, which will help stabilize housing prices.
SMITH: I think, given what we've been through, it may not be barnburner of a celebration. But at least we can say things are starting to look better.
SMITH: Another analyst, Tom Lawler, agrees. He sees the most encouraging signs in the Midwest, where sales increased, even while prices pretty much held their ground. But, Lawler notes, there are still millions of mortgages under water. And part of the reason this August looks good, he says, is because last August was so bad.
TOM LAWLER: You would not look at this report and get excited to the upside, it's simply nice to get at least one month's set of numbers that you go, wow, man, maybe things aren't as bad as I thought.
BERMAN: So come on up this way. Now, this is the first of three bathrooms.
UNIDENTIFIED WOMAN: Great.
SMITH: Back in L.A., Debra Berman has already got several potential buyers lined up to see this property that's only been on the market a day.
BERMAN: So far so good?
UNIDENTIFIED WOMAN: I love it.
BERMAN: All right. Now...
SMITH: With low mortgage rates and low home prices, Berman says buyers may be sensing that this is the best moment to nab a deal.
BERMAN: There is no magic in this marketplace. It is all the price. And if a property is priced correct and the buyer sees the value, badda bing, you've got yourself a deal.
SMITH: Well, almost. As employment continues to lag, many people still can't come up with down payments. And as banks have tightened up on lending, many can't qualify for loans, which may explain why August also saw more deals fall apart at the last minute and fail to close.
Tovia Smith, NPR News. Transcript provided by NPR, Copyright National Public Radio.