Home resale’s rose 4 percent last month, according to the March Existing Home Sales report. A total of 5.1 million homes were sold on an annualized, seasonally adjusted basis. Our office in Asheville our 1st quarter was up over 30% in closed sales. The Asheville Real Estate market seems to enjoying some nice increases and with new listing down considerably inventory will start decreasing.

March marked the 6th month out of eight in which sales volume has increased and sales are up 32 percent from July 2010 lows.

At the current pace of sales, the entire home resale inventory would be depleted in 8.4 months. This is 0.1 months faster as compared to February, and a full month faster than the 12-month average.

The Existing Home Sales report also included a breakdown by buyer-type.

  • First-time buyers bought 33% of homes, down from 34% in February
  • Repeat buyers bought 45% of homes, down from 47% in February
  • Investors bought 22% of homes, up from 19% in February

35 percent of buyers paid in cash.

According to the National Association of REALTORS®, 40 percent of March home resales were "distressed properties". Distressed homes include foreclosures, short sales, and REO and typically sell at discounts. Home prices are based on the basic economic theory of Supply and Demand. So, with home supplies dropping and demand for homes rising, it's reasonable to expect home values to rise later this year.

If you're in the market for a home, play the recent trends to your advantage. Today, homes are affordable and mortgage rates are low. This may not be the case later this year. The best "deals" of the year may be what you buy now.

Paulson is a pro at buying the distressed bonds of bankrupt companies, and then converting  the debt to equity in reorganization and benefiting  from the potential run up. He mentioned one of his greatest plays — K-Mart, which emerged from bankruptcy at $10 a share and then skyrocketed to $190 a share.

His crystal ball is for 2% GDP growth for 2011 and 2012 and he warns that the Fed’s promise of quantitative easing should contribute to double-digit inflation over the next few years.

As this is the best time in 50 years to buy homes, Paulson advised his listeners, crowded into 3 separate dining rooms, to issue 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

“If you don’t own a home buy one,” Paulson recommended; ” if you  own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”