The soon-to-expire $8,000 federal tax credit for first-time homebuyers sent sales of existing homes soaring in October, the National Association of Realtors reported Monday.

Sales of existing single family homes, townhouses, condominiums and co-ops surged 10.1% to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, up 23.5% from the same month last year. The NAR has not seen numbers like this since February 2007, when the annual pace was 6.55 million.

"Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," said Lawrence Yun, NAR chief economist. He cautioned, however, that, "With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

The spike in sales in recent months has significantly drawn down the inventory of unsold homes. There were 3.57 million homes on the market at the end of October, down 3.7% from September, representing a 7-month supply, down a full month from September and down 14.9% from a year before and its lowest level since February, 2007.

Prices, however, continued declining, with the national median price coming in at $173,100 for October, down 7.1% from the same month last year.Distressed properties accounted for 30% of sales in October, according to NAR, up slightly from 29% in September and down marginally from 31% in August.

Single-family home sales were up 9.7% to a seasonally adjusted annual rate of 5.33 million, 21.4% ahead of last October. The median existing single-family home price was $173,100 in October, down 6.8% from a year ago. Existing condominium and co-op sales jumped13.2% to a rate of 770,000 units, up 40.8% year-over-year. The median price was down 10.4% to $172,900.

Regionally, the Northeast rose 11.6% to a pace of 1.06 million, up 27.7% from last October, with the median price falling 2.6% to $235,400 on an annual comparison. The Midwest was up 14.4% from September, 28.8% ahead of last October, with the median price up 1.1% to $146,600. The South was up 12.7% to 2.3 million, a year-over-year gain of 25.7%, with the median price down 6.3% to $151,100. The West was up 1.6% to 1.31 million, 12% above a year ago, and the median price was off 14.7% to $220,200.

"In parts of the country, especially in Southwestern states but also in Florida and suburban Washington, D.C., we've been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly," said Vicki Cox Golder of Vicki L. Cox & Associates in Tucson, Ariz., the newly installed president of the Realtor group. "In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive."

Yun was optimistic regarding the impact of the newly enacted federal expanded home buyer tax credit, which will continue through April. "There is still a large pent-up demand that can be tapped before the tax credit expires," Yun said. "Our recent consumer survey further shows that 13% of successful first-time buyers had a previous contract that was cancelled or fell through--there likely are many more buyers who were attempting to purchase but simply ran out of time."