Vivenda Real-Estate Newsletter

Welcome to the first issue of our Real Estate Trends Newsletter. We will be publishing and distributing this newsletter to our Vivenda community every two weeks. I started this newsletter with the good news, pretty rare these days! You can also go to our website - www.vivendasoftware.com - to view additional information about the real estate industry and Vivenda.

• Sales of new homes post unexpected gain in September
• Sales of existing homes plunged by a record amount in September
• US home construction in September fell to lowest level in 14 years
• 2007  decline in existing home sales steeper than previously anticipated
• Local outlook: Sacramento, California

Sales of new homes post unexpected gain in September

Sales of new homes posted an unexpected gain in September although the improvement came after sales had fallen to the slowest pace in more than a decade.  The Commerce Department reported on October 25, 2007 that sales of new homes rose by 4.8 percent last month to a seasonally adjusted annual rate of 770,000 units. That level of activity was still 23.3 percent below a year ago, indicating that housing remains in a steep downturn. The report on home sales showed that the median new home price in September -- the point where half the homes sold for more and half for less -- rose to $238,000, up 2.5 percent from August, which had seen prices fall to the lowest level in nearly a year. The rebound in home sales was led by a 37.7 percent surge in the West. Sales were also up 0.5 percent in the South. But sales of new homes fell by 19.5 percent in the Midwest and 6.6 percent in the Northeast.

Sales of existing homes plunged by a record amount in September

Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years. The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record. The weakness in sales translated into further pressure on prices. The median price -- the point at which half the homes sold for more and half for less -- fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It marked the 13th time out of the past 14 months that the year-over-year sales price has decreased. The 8 percent decline in sales was bigger than the 4.5 percent decline that had been expected.

US home construction in September fell to lowest level in 14 years

U.S. home construction starts fell 10.2 percent in September to their lowest level in more than 14 years while building permit activity, a sign of future construction plans, also dropped to a level not seen since mid-1993, a government report on Wednesday showed. The Commerce Department said housing starts set an annual pace of 1.191 million units in September, lower than the 1.285 million units expected by economists. It was the lowest pace for housing starts since the March 1993 rate of 1.083 million units. Building permits fell 7.3 percent, the sharpest decline since January 1995, to an annual rate of 1.226 million.

2007 decline in existing home sales steeper than previously anticipated

The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade. In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year. This year's sales would be the lowest since 2002, when sales hit 5.63 million. Sale prices for existing homes are forecast to drop 1.3 percent to a median of $210,200 this year -- a slight improvement from last month's prediction of a 1.7 percent decline. Next year, the trade group expects existing home sales to climb to 6.12 million. New home sales are projected to fall to 805,000 this year down 23 percent from 1.05 million last year. If that forecast is accurate, it would be the worst year since 1997, when 804,000 newly constructed homes were sold. In 2008, 752,000 new home sales are expected.

Local Outlook: Sacramento, California

Sacramento's new-home prices have rolled back to where they were in spring 2004, and they're predicted to keep dropping before there's any recovery. The average new home in the six-county area costs $429,678, and the median price has fallen to $389,990, according to the latest data from new-home analyst The Gregory Group. But lower prices haven't attracted buyers. Sales during the previous quarter also fell to their lowest level in three years. Builders sold 1,592 homes during the three months that ended Sept. 30, an 18.6 percent drop compared with the same period last year. The Gregory Group predicts that 2007 will have the fewest new-home sales since it started tracking activity in 1999. The slump is expected to last at least until the end of 2008.