Buying & Selling: Surprise Rise In Home Sales

It seems elementally simple, doesn't it? Wages go up, home sellers cut prices, and people start buying again. Yet the pundits are mystified and bewildered by such a turn of events, when even Lereah himself admits that the price cuts are doing their job:

"As expected, existing-home sales appear to be stabilizing, fingers and toes crossed," said David Lereah, chief economist for the Realtors. Market fundamentals are improving, he said.

What's particularly interesting is this line:

Sales of condos dropped 4.8% to 778,000. Median sales prices are down 5.3% in the past year to $214,300. Condo sales are down 14.5% in the past year. The inventory of unsold condos rose to 9.1 months.

Condo glut, baby. Until that inventory gets moved or converted to rentals or office space, those things will sit like empty shells dotting the landscape. Or unless prices drop, of course. While Lereah and his shills will paint this as everything from "buyer psychology" to population changes, the truth is the truth: It's all about high wages and low prices.

Posted at November 28, 2006 04:06 PM

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It seems elementally simple, doesn't it? Wages go up, home sellers cut prices, and people start buying again. Yet the pundits are mystified and bewildered by such a turn of events, when even Lereah himself admits that the price cuts are doing their job: "As expected, existing-home sales appear to be stabilizing, fingers and toes crossed," said David Lereah, chief economist for the Realtors. Market fundamentals are improving, he said. What's particularly interesting is this line: Sales of condos dropped 4.8% to 778,000. Median sales prices are down 5.3% in the past year to $214,300. Condo sales are down 14.5% in the past year. The inventory of unsold condos rose to 9.1 months. Condo glut, baby. Until that inventory gets moved or converted to rentals or office space, those things will sit like empty shells dotting the landscape. Or unless prices drop, of course. While Lereah and his shills will paint this as everything from "buyer psychology" to population changes, the truth is the truth: It's all about high wages and low prices.