National home sales rise, bolstering an economist's belief that the market is beginning to turn around.
A national report that sales of existing homes rose in September signals an encouraging trend and suggests that housing prices are stabilizing, one of the country's top real estate forecasters said at a housing conference Monday.
"The fact that it went up is very good news, because everyone thought it was going to go down," said Karl Case, co-creator of the Case-Shiller Home Price Index.
Case was in Maine for the state's annual Affordable Housing Conference. His visit coincided with Monday's release of the monthly home sales figures from the National Association of Realtors. They showed sales last month up 10 percent, an annual rate of 4.5 million.
In August, resales increased by 7.3 percent, 4.12 million.
The figures are well below a year ago, when the annual rate stood at 5.6 million. And they have yet to capture the impact of the foreclosure crisis, which is expected to keep homes off the market in October that might otherwise have been sold.
If October sales do rise, Case said, it will be an indicator that depressed prices and historically low interest rates are overcoming the chaos brought on by foreclosure moratoriums and government investigations.
"Housing is down 30 percent, and that's a hell of a discount on something you need to buy," he said.
Case is an emeritus professor of economics at Wellesley College in Massachusetts, where he taught for 34 years. The Standard & Poor's/Case-Shiller Home Price Index, which tracks 20 metropolitan markets, is a widely watched barometer on national home values.
On a national level, September's increase followed a sales plunge in the summer, after the expiration of a federal subsidy for first-time homebuyers. It is the third month this year that the market has stood without the tax credit, which indicates a healing process, according to the National Association of Realtors.
Case also sees that process evolving, but he said he can't make a confident prediction for sales growth the rest of this year. Much depends on how the foreclosure crisis is resolved and how long it takes, he said, because 20 to 25 percent of all sales nationally are lender-owned properties.
Case, a strong believer in homeownership, considers today's housing market a bargain for people who can afford to make the investment.
"Even with 9 percent unemployment and perhaps 15 percent underemployment, that means 85 percent of people still have steady jobs," he said.