Home sales slump here in 3rd quarter
So the Triad's existing-home sales slumped in the third quarter.
Actually, they fell more than 8 percent from the third quarter of last year, according to a report out today from the Greensboro Regional Realtors Association and Triad MLS.
Seasonally adjusted figures show that 2,636 existing single-family homes sold in the eight-county Triad during the third quarter. Nearly half were in Guilford County, with 877 of those in the Greensboro area.
Though average Greensboro home prices rose slightly in the past year, they didn't keep pace with inflation - indicating that real prices are down slightly, says local economist Don Jud.
The Realtors group reported Thursday that existing home sales in Greensboro were down for September, when compared to a year before, but that the average home here is selling for more than it did a year ago.
Oddly, the group's September report claimed that home sales were down more than 26 percent compared to a year before; however, the Realtors said that the average sales price for an existing single-family home sold here climbed 7 percent in the same period.
At this point, no one I've talked to has been able to explain that particular data. I imagine the average existing home sale price might have climbed a little bit, since the credit crunch and the subprime collapse have made it challenging for would-be buyers of cheaper homes. And a lot of homes in the $100,000s seem to be sitting on the market. But I don't think that trend, alone, could explain away such a dramatic jump.
Anyone have thoughts on that?
Comments (1)
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I think you answered your own question, Michelle. One way for home sales to fall but home prices to rise would be for the overall supply of homes on the market to fall. But the major factor in housing markets these days is the credit crunch, and it seems unlikely that it would be affecting home sellers more than home buyers. (On the other hand, if this drop in supply is happening for reasons other than the credit crunch, it could be a factor.)
A more likely explanation is to break down the market for single-family homes into different segments, low-priced vs. mid-priced vs. luxury, for example. The credit crunch almost certainly affects buyers on the lower end of the scale more than in other segments. If their buying is curtailed by enough but there's little or no effect in the higher price ranges, one could easily see sales fall but the average sales price rise. Your question is whether this effect is large enough to lead to the observed data, and while I haven't seen data from a breakdown like this, my guess is that this is what's going on. Perhaps my colleague Don Jud, who generated the data you're writing about, would have some insight.
Posted on October 13, 2007 6:48 PM