“Housing affordability has never been better, but the high unemployment rate, slow job growth and difficulty in obtaining credit, especially for high-cost homes, continue to be stumbling blocks to a complete housing recovery,” according to Jeff Bell, president of the Silicon Valley Association of REALTORS®.

Uneven Recovery, but Sales Clearly “Off Bottom”
The National Association of REALTORS® reports today that sales of existing homes in October declined 2.2 percent to a 4.43 million annual rate from 4.53 million in September. The national median existing-home price for all housing types was $170,500, down 0.9 percent from October 2009.

NAR chief economist Lawrence Yun said the recent sales pattern can be expected to continue, but he believes sales will steadily improve to healthier levels of above 5 million by spring of next year. “The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels,” he said.

Overly tight credit is making it difficult for some creditworthy borrowers to qualify for a mortgage. “A return to common sense loan underwriting standards would go a long way toward achieving responsible, sustainable homeownership,” said NAR President Ron Phipps.

Home Builder Confidence Up, but Obtaining Credit Is a Problem
Home builders are also complaining that tight credit is getting in their way. Nationwide housing starts declined 11.7 percent to an annual rate of 519,000 units in October. Despite the decline, the National Association of Home Builders reports builder confidence is up slightly, as builders are starting to report some improvement in buyer demand and quality of buyer traffic.

“The great concern is that this positive momentum will be stifled due to builders’ inability to obtain financing for new construction at a time when inventories of completed new homes are very thin,” NAHB Chief Economist David Crowe said in a press release.

In addition to tight credit, worry continues about the high unemployment rate, slow job growth and looming shadow inventory. Distressed homes accounted for 34 percent of sales in October, according to NAR. There’s also the threat of foreclosures mounting as a growing amount of homeowners remain out of work and those who have borrowed against their equity default on their mortgage.

GDP Growth Better Than Anticipated
On the upside, the Commerce Department reports the economy grew at a 2.5 percent annual rate in the third quarter, more than previously calculated, due to increased shipments abroad and business spending for equipment and software.

Santa Clara County October Median Up Slightly
Although October home sales fell, Santa Clara County saw a slight year-over-year gain in its October median home price. According to a California Association of REALTORS® report released today, the October median price for a single-family home in Santa Clara County was $637,750, was up 8 percent from the same time a year ago. October sales of single-family detached homes in the county were down 24 percent from October 2009, when the first-time home buyer credits was available.

C.A.R. reports DataQuick statistics, which are based on county records data rather than MLS information, ranked the Silicon Valley cities of Los Altos, Palo Alto, Cupertino and Los Gatos among the top 10 cities with the highest median home prices in California during October 2010. The October median home price in Los Altos was $1,700,000; Palo Alto, $1,050,000; Cupertino, $1,022,500; and Los Gatos, $1,000,000.

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