With prices way down, home sales are showing sustained gains across the country. Year-over-year home prices fell a record 15.6 percent in the second quarter of 2009, but compared with the first three months, home prices actually increased, with a burst of house sales led by -- of all places -- foreclosure capitols Arizona, Florida and Michigan.
California, Florida, Arizona, Nevada and Michigan have all led the way in foreclosures and home price devastation over the last year, furthering what I've somewhat clumsily called the MichiCaliFlAriVada crisis (really, it rolls right off the tongue!). But economists say we're seeing a hopeful deceleration of the housing collapse. In fact, California and Florida are two of only nine states with year-over-year increases in home sales. In other words, just like everything else in the economy, things are getting slightly less terrible, slowly.
"With low interest rates, lower home prices and a first-time buyer tax credit, we've been seeing healthy increases in home sales, which are a hopeful sign for the economy," says Lawrence Yun, National Association of Realtors Chief Economist. That explains why first-time buyers currently make up a third of the home sales market. Distressed home sales from foreclosures and short sales accounted for 36% of all purchases in the second quarter, twice their average, according to the Wall Street Journal.