First Glimmer of Hope in Real Estate

It may be that the price of real estate has fallen enough to attract buyers. Price will go up when the existing high inventory levels go back to normal. The high level of foreclosures accelerates this process. Banks generally don't have the expertise or staff to take care of the houses they own due to foreclosure. Many of these bank-owned houses have fallen into such disrepair that they will have to be torn down.

Last Friday, the National Association of Realtors said that existing home-sales increased by 5.5% in September from August's level. Prices continued to fall but the level of sales was the highest in more than a year and inventories of homes still on the market fell 1.6% in September for a 9.9 month supply; there was a 10.6 month supply at the end of August.

Today, the Commerce Department released September new-home sales. Single-family home sales increased by 2.7%; during August sales decreased by 12.6%. Inventories fell 7.3%.