Existing home sales rose slightly in October -- which is the first rise since February -- although September was revised marginally higher.

Even though it is too early to suggest that resales have found a bottom after a 4% plunge in July to an annualized 6.33 million units, existing home sales have posted figures of 6.30 million in August, 6.21 million in September, and 6.24 million in October. The comparatively steady pace of demand in the last three months implies that the resale market is starting to stabilize. Furthermore, the situation seems somewhat brighter in the single-family sector, where sales increased by 1.3% in October, essentially retracing September's dip, and have held around 5.50 million units in three of the four months from July, reported RBS Greenwich Capital.

Meanwhile, the condo segment remains down, dropping almost 5% in October. In terms of regional sales, the Northeast fell by roughly 3% in and in the South by roughly 1%, but they were unchanged in the Midwest and increased by above 6% in the West, which has been the worst performing region this year.
The number of homes for sale rose in October, but considering the rise in sales, the months' supply figure went up only to 7.4 months from 7.3 months in October. The months' supply figure stayed well above the 6.0 months builders view as being indicative of a healthy balance between supply and demand, but it has averaged 7.3 months from July and also shows some form of stabilization in the resale market, RBSGC said.
Although much will be made of the 3.5% year-over-year decline in the median existing home sale price in October, RBSGC noted why this measure of home prices is unreliable. Even though there is no doubt that certain markets will a experience home price dip, the National Association of Realtors' third quarter data indicated that while 45 metro areas posted a year-over-year drop from July to September, 102 areas posted increases, with 21 recording double-digit gains.

In any case, RBSGC said a more accurate read on home prices will be available this Friday with the release of the Office of Federal Housing Enterprise Oversight's third quarter home price index.


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