RealtyStore Real Estate Blog

“Aug. 25 (Bloomberg) — Sales of previously owned homes in the U.S. rose 3.1 percent in July, a gain that masked further housing weakness as inventories of unsold properties increased.

“Resales advanced more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties, the National Association of Realtors said today in Washington. At the same time, the median price dropped 7.1 percent from July 2007, and the number of homes for sale jumped to a record.

“Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. At the same time, the glut of houses for sale means property values will probably keep dropping, putting pressure on household wealth and consumer spending.

“‘Existing home sales have likely stabilized,’ Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said in an interview with Bloomberg Television. ‘In terms of demand, we’re probably close to the bottom. In terms of prices, we don’t think we’ll see a bottom until the end of next year.’”

“Aug. 21 (Bloomberg) — Billionaire Sam Zell said the housing market could start recovering as early as next year and he’s focusing on investing in debt rather than equity.

“‘We believe that the opportunities, particularly in difficult situations, are in the debt,’ said Zell, who made his fortune building the largest publicly traded office and apartment companies in the U.S. ‘We have been focused on, not only in real estate but in corporate, identifying debt situations where it is trading at a discount.”

“Early next year the U.S. may see the bottom of the single- family housing market, Zell, 66, said in an interview today with Bloomberg Television. ‘I think it will be relatively fragile as confidence builds and it will take probably another year for confidence to be completely returned.’

“Zell is focusing on debt as the real estate recession deepens. Existing U.S. home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent. Record foreclosures have brought on more than $505 billion in capital losses and asset writedowns worldwide and companies that lent money to homeowners and repackaged the debt into securities saw those businesses falter.”