Existing-home sales soar 7.2 percent in July

First-time home buyers surged into the market, helping drive up the sales of previously owned homes 7.2 percent in July. It was the largest month-to-month sales gain since 1999.

"Those numbers are fantastic," said Joel Naroff, of Naroff Economic Advisors in Bucks County.

"Six months ago, who in their right mind would even think of listing their homes? No one was buying," he said. "We are beginning to see a reversal in that psychology."

Yesterday's numbers from the National Association of Realtors set all sorts of records, including the first time in five years that existing-home sales have increased four months in a row, and the first time since November 2005 that the number of sales was higher year over year.

The report came on the same day that Federal Reserve Chairman Ben S. Bernanke declared that the U.S. economy was on the verge of a recovery, despite challenges.

"The prospects for a return to growth in the near term appear good," Bernanke said in a speech at an annual Fed conference in Wyoming.

House prices appear to be stabilizing - while the median price of $178,400 is down 15.1 percent from July 2008, it's close to the $181,900 reported in June.

Locally, "I think we are starting to see a bottoming-out, maybe a little bit of a turnup," said Steven Storti, senior vice president at Prudential Fox & Roach, which publishes the monthly HomExpert Market Report tracking local sales.

In the eight-county area that includes Philadelphia and nearby counties in Pennsylvania and New Jersey, July sales of existing homes were down by 2.75 percent from July 2008, to 4,816 houses. But it's up from the 3,854 units sold in May, the report shows.

"Generally, you have an ebb and flow based on interest rates," Storti said. "As prices went up and interest went up in 2005, you saw demand wane. But then it fell off a cliff when the economic news went sour in the fall."

Storti said that, compared with other regions, the Philadelphia market did not see the dramatic declines in housing sales or prices. That's why it is not likely to see dramatic upturns either.

So what's luring buyers back into the market?

"The federal tax credit of $8,000 available to first-time buyers - that's one factor," said Barri Beckman Baurer, manager and associate broker at Weichert Realtors in Jenkintown.

"Interest rates are at an all-time low, and the value of homes is at an all-time affordable level," she said. "Buyers have a big selection of inventory. There's pent-up demand that's being unleashed.

"First-time buyers are the ones moving the market," she said. "They don't have anything holding them back from taking advantage of those factors."

Nationally, 30 percent of July's sales were attributable to first-time buyers, yesterday's report from the National Association of Realtors said.

In Jenkintown, Beckman Baurer thumbed through her office's records for a recent example.

A two-bedroom condominium in a wooded setting in Abington Township went on the market for $97,500 in June. For weeks, there were nibbles but no bites.

Then, earlier this month, two first-time buyers put in all-cash bids. The winner, who bid closest to the asking price, should make settlement in a week.

"We haven't seen many multiple-bid situations in the last year or two," she said. "In the last three months, I've seen several multiple bids."

County            July 2008         July 2009      % Chg.

Bucks                602                615            2.2

Chester                555                500          -9.9

Delaware             510                556            9.0

Montgomery          851                851            0.0

Philadelphia       1,297               1,180          -9.0

Burlington             424                429            1.2

Camden                472                460          -2.5

Gloucester             241                225          -6.6

Total                4,952               4,816          -2.75

SOURCE: Prudential Fox & RoachEndText