Sales of Existing U.S. Homes Increase to Three-Year High

[Purveyor]

Source: Bloomberg

Sales of previously owned homes rose more than forecast in November to reach a three-year high as lower borrowing costs sustained the U.S. housing rebound.

Purchases of existing houses increased 5.9 percent to a 5.04 million annual rate, the most since November 2009, the National Association of Realtors reported today in Washington. The median forecast of 82 economists surveyed by Bloomberg projected an increase to a 4.9 million rate. Property values climbed 10.1 percent over the past 12 months as inventories dropped to the lowest level in 11 years.

Record-low mortgage rates and an improved job market are boosting sales and cutting inventories, giving the market the opportunity to absorb foreclosures. Prices are rising as a result, which will probably draw more buyers seeking to take advantage of current affordability in housing, helping retailers such as Pier 1 Imports Inc. (PIR) and Lowe’s Cos. Inc.

“The housing market is staged for continued improvement,” Anika Khan, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, before the report. “Underlying fundamentals are continuing to improve despite uncertainty. We’re seeing better labor market numbers, and that’s also reflected in better consumer confidence. Sales activity is going to be volatile but the underlying trend is still improving.”

Read more: http://www.bloomberg.com/news/2012-12-20/sales-of-existing-u-s-homes-rose-to-three-year-high-in-november.html

[enlightenment]

1. Investors are fueling this trend in Las Vegas.

Particularly at the lower end of the price ranges. A friend just recently purchased - after eleven previous offers fell through. Her relator was sympathetic, but could only counsel her to keep making offers - she got lucky with the last one, but it was pure luck. Had the paperwork not gone through, the home would have gone on the auction block the next day.
Investors with cash are apparently doing the scoop and run on people who actually want a home. The investors don't want to live in the homes; they just want to turn them for a profit - but because they are offering cash and bidding the asking price or even slightly higher, they are coming out the winners time and again . . . and the practice is starting to drive the price of these homes up, making it even harder for people who are trying to get their foot on the housing ladder.

This is precisely what fueled a lot of the increase in home values in the last "bubble" - at least in Las Vegas - and it is with a very sad sense of deja vu that I'm watching the same thing happening again.