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First the good news.
Home sales in July jumped by 3.1%, the highest level in five months, the inventory of unsold single-family homes declined slightly, and home prices in the Midwest climbed 1% compared to a year ago.
But the National Association of Realtors July report released Monday also has plenty in it to worry about.
Single-family home prices fell 7.7% compared to a year ago when the credit crunch was just beginning. In the west, prices fell 22% compared to a year ago, though sales during the same period were up 0.9% on a seasonally adjusted basis (Sales are increasing because first-time home buyers and investors have been jumping on foreclosures and other bargains).
We’re a long way from recovery, I’m afraid. Interest rates are creeping up and the foreclosure crisis isn’t letting up in California, Florida, Nevada, and Arizona. And even in the relatively strong Northeast market, Connecticut, Massachusetts, abd Rhode Island are in tough shape and could weaken further when homeowners get their winter energy bills.
It could be a while before we see a really positive home-sale report.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.