Friday, October 23, 2009

Housing Sales "Up" In The U.S, But The Devil is in The Details: Median Price Drops to $174,900, Fraud

The National Association of Realtors reports today that home sales "jumped". This is what you see at the very top of the report:

"Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months. Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4% to a seasonally adjusted annual rate1 of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007."

Now, this is what you find at the very bottom of the report:

"The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area".

What is even worse is that the $8k credit appears to have been scammed, out of the 400,000 people who participated in the program, at least 70,000 cases could have been fraudulent, and also 500 children applied for the credit according to Fox (video). One wonders who was really buying these houses.

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