Although September sales were down a bit from August levels, the above chart shows that the uptrend in sales is still intact. Sales are up 11% in the past year.
Despite all the talk about the great shadow inventory of foreclosed properties that have yet to hit the market, the inventory of homes for sale has fallen to 5.9 months' worth of sales. This is much lower than the levels that prevailed in the 1980s, and is only marginally higher than what we saw in the boom years of the early 2000s. Bloomberg's story on the subject contains these choice tidbits: "sales of previously owned U.S. homes decreased in September ... restrained by a lack of supply," and ""the median price from a year earlier jumped by the most since 2005 as inventories dwindled." If home-buying enthusiasm picks up, we could see some real shortages—and higher prices—in the coming year or two.
This last chart illustrates the degree to which prices have rebounded over the past year.
Sales are down and prices are up because of restrained supply: quite an amazing development.