Home Sales Staying Strong Nationwide

Despite a projected decline by economists, demand bolstered by hurricane victims caused sales of previously owned homes to hold steady in September. Data released by the National Association of Realtors indicates sales of existing homes remained unchanged at a seasonally adjusted, annual rate of 7.28 million, the same as August and the second-highest monthly total on record. The Association said that without the sudden, increased demand for housing in the aftermath of Hurricane Katrina, the figures would have fallen as anticipated.

Belief that rising interest rates will start to cool off the booming housing market, economists predicted a 1.2 drop in sales during September. With the average 30-year mortgage rates above 6.0 percent nationwide, sales are still expected to diminish in upcoming months. The median U.S. price for an existing home stood at $212,000, up 13.4 percent from September of 2004. This marks a slight cooldown, as a 15.6 percent price increase was recorded in August, compared to the same point a year ago.

Figures show just how drastically Gulf Coast real estate has been impacted by the recent onslaught of storms, compared with the rest of the country:

• Sales plunged by a whopping 85 percent in New Orleans, La., compared to September 2004, but across the state in Baton Rouge, home sales were up 150 percent. Baton Rouge real estate prices have jumped more than 30 percent in the past 12 months.
• In Mobile, Ala., sales increased 75 percent from a year ago and prices are up by 15.3 percent.
• Even San Antonio, Tx., where many of Rita’s victims relocated, saw a 58 percent jump in sales, while prices rose by 13.1 percent over a year ago.

To illustrate the storms’ impact by region, overall sales rose 3.7 percent in the South. In the Northeast, sales rose but by a more modest 0.8 percent. The Midwest and West saw dropoffs in sales of 3 and 4.1 percent, respectively.