Tax credit deadline rush boosted existing-home sales in Nov

Existing home sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November, compared to 6.09 million in October, the National Association of Realtors reported today. The sales rate is up 44.1 percent from November of 2008.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” said Lawrence Yun, NAR chief economist.

He expects a brief drop in sales until the spring when buyers are expected to take advantage of the expanded tax credit that “hopefully will take us into a self-sustaining market in the second half of 2010.”

“In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline,” he said.

Nearly all markets except San Diego, Riverside and Sacramento saw solid sales gains compared to one year ago, Yun noted.

NAR President Vicki Cox Golder, who owns real estate firm Vick L. Cox & Associates in Tucson, Arizona., said buyers still had opportunities to purchase homes “near the bottom of the price cycle.”