Sales of existing homes in October beat expectations, registering a gain of 1.4 percent from the previous month, but that number masks a market that is heavily weighted to the low end. Realtors say they expect sales to bounce around the same levels for the rest of the year, with a very slight annual gain from 2010. This sales stabilization of sorts would suggest that home prices might soon do the same, especially as inventories come down, but that has not been the case.
Home prices continue to drop, especially for single family homes, which saw a hefty 5.8% price drop in October from a year ago (always measure prices year-over-year due to their heavy seasonality). The reason is that only one price segment of the market is really selling, and that segment includes the most distressed, discounted homes.
"We are getting a bifurcated recovery, the lower end seeing strong activity, while the upper end still sagging and showing very little interest," said the Realtors' chief economist Lawrence Yun.