Sales of existing single-family homes are on the rise in an increasingly large proportion of the country. During July, sales rose to the highest level in five months, surprising many analysts.

The primary reason for the increasing sales volume is pegged to lower prices.

This was revealed in a recent survey and report from the National Association of Realtors. Only about one-quarter of major metro areas showed rising home prices, compared to prices last year. In the second quarter of this year, 35 out of 150 metro areas demonstrated gains in home prices.

"In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values," said Richard Gaylord, NAR president. "Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising. Today's buyers are very well positioned to build wealth overtime."

During the past year, home construction costs were larger than prices of comparable existing homes, according to the National Bureau of Economic Research. Their study depicted constructions expenses to be higher in 33 of the surveyed 79 metro areas.

Foreclosures and "short sales" are accounting for about a third of home sale transactions. This is a major factor in decreasing the national median price of homes.

"The biggest home sales gains over the past quarter have been in some of the markets with the steepest and fastest price drops," said Lawrence Yun, NAR's chief economist. "Areas with affordable housing and healthy local economies continue to see price growth."

"Prices have fallen sharply and quickly in very distressed markets, but most or all the price declines may have already occurred in these areas since buyers have now returned to those markets," Yun noted.

Also, the momentum of buying is likely to continue in light of the housing stimulus package that was recently enacted. About 2.5 million first-time buyers are expected to take advantage of the $7,500 tax credit between now and the middle of next year."

Q: What are home builders doing to reduce their inventories?

A: Home builders nationwide are making a concerted effort to reduce the inventory of their unsold new housing units, according to the National Association of Home Builders. The current rate of single-family housing construction starts is at the lowest rate since January 1991.

"The actions that home builders are taking now to keep a lid on new production are slowly but surely helping to bring supply and demand back into balance, and put us on the road to a much healthier housing market," said Sandy Dunn, NAHB's president. "While there is definitely a sense we are nearing the bottom of the downswing in home sales, builders are not ready to start ratcheting up production just yet."

Q: Are green homes becoming more popular?

A: Today's home buyers are placing a higher priority on purchasing a "green home" — one that is eco-friendly and low on energy costs. About 78 percent of homeowners earning less than $50,000 per year said they would be more inclined to purchase a green home, according to a survey conducted by the U.S. Green Building Council and McGraw-Hill Construction.

"These days, the ability to afford the utility bill is just as important as paying your mortgage," the survey report stated.

"Green homes offer homeowners and buyers a ray of hope. Lower energy costs are increasingly demanded by and available to home buyers at all income levels."

When deciding to remodel homes, going green was the top reason cited by survey respondents. More than 80 percent of respondents said they believe green homes are not just more economical, but also offer better and healthier places to live. Nearly half (44 percent) of renovated homes, during the past three years, used products chosen for their green attributes, the study report noted.

The lower operating costs of green homes, coupled with generally lower home prices and current low mortgage interest rates, are motivating more people to take action now in finding and purchasing a home.

Q: How much did Donald Trump's Palm Beach estate sell for?

A: Luxury homes are sometimes more newsworthy than their affluent owners. One recent transaction that received a lot of publicity was the $100 million sale of Donald Trump's estate in Palm Beach, Fla. The property, including six acres of land with 475 feet of ocean frontage, was purchased by Trump in 2004 for a reported $41.25 million dollars.

The main house has nine bedrooms in its 62,000 square feet. It includes a ballroom, media room, wine room, art gallery, 48-car garage and other amenities. The estate also contains a 4,100-square-foot conservatory and two guest houses.

Ed McMahon's lavish home in Beverly Hills, Calif., has also caught the attention of editors. It was near the point of foreclosure when Donald Trump offered to purchase it. Subsequently, another unidentified person reportedly purchased the property for an undisclosed amount. The previous loans against the property amounted to a reported $4.8 million.

The estate is a 7 bedroom, 5-bath mansion — 7,000 square feet — located in the gated complex called "The Summit."

Perhaps luxury homes are particularly newsworthy because we all dream of owning such a residence, whether that's a real future possibility or not.

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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