The perennial optimism of the National Association of Realtors is finally being rewarded with a little good news for buyers and sellers. Existing home sales rose slightly in November after months of declines, says NAR's latest monthly tally.

But is it a dead cat bounce or a bottom?

Chief economist Lawrence Yun says the upturn was due to the stabilization of markets in the wake of mortgage disruptions earlier in the year, but there could be other reasons -- homebuyers may simply be tired of being scared out of their wits by the national press. How long can anyone remain in a state of panic before they start to ignore the bombs and go on with daily life -- including buying a house?

Existing home sales have stayed in a narrow range following a near-20 percent plunge in September. While Yun says that suggests stability, he credits "near historic low interest rates" and "decelerating price declines, along with a modest reduction in the number of homes on the market."

Actually, sales are even better than the NAR reports. Here's why:

As of November, the seasonally adjusted annual sales rate was 5 million units, 20 percent below the 6.25 million units sold by November 2006.

That sounds disastrous until you consider that In 2004 and 2005, over one-third of homes sold to second home buyers and investors. And about 10 percent of all buyers were subprime.

By November 2007, the speculators and poor credit risks were driven out of the market. Those were the buyers who wouldn't have bought anyway -- except for the incredible oversight of the banking regulators.

That means the 2007 numbers are comparing favorably to previous years when the market wasn't torqued by unusual numbers of buyers. Occupying homebuyers are driving the markets today in greater numbers than during the speculative boom of 2001 to 2005.

If greater numbers of occupying homebuyers are buying, the bottom is here, and there's an outside chance a new boom could explode.

Why? Prices are down over three percent from November 2006. Homes to choose from are plentiful at a 10-month supply on hand. The median home price in America is back down to $210,200, only $15,000 higher than 2004.

Buyers still believe that a home is a pretty good place to put their money, and even with stricter credit, most can still get in with as little as 5 percent down.

Published: January 3, 2008

Use of this article without permission is a violation of federal copyright laws.

Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.