December Existing Home Sales Down Sharply While Sales For 2009 Increase From Prior Year

While the sale of existing US homes fell at the sharpest rate on record in December, when compared to the prior month, sales for the entire year increased almost five percent from 2008 levels. Despite the increase in 2009 sales, prices dropped by 12.4% from 2008 in what is probably the sharpest annual decline since the Great Depression.

Watch for tomorrow’s article which provides an in-depth analysis of the local DFW Metroplex housing market. Here’s a hint: it’s considerably better.

Sales of previously owned US homes fell at the fastest pace on record last month as the boost from a popular tax credit faded. The National Association of Realtors said existing home sales fell 16.7 percent to an annual rate of 5.45 million units in December.

For the entire year, sales rose 4.9 percent in 2009 to 5.156 million units. Prices fell from 2008 by 12.4 percent, “probably the largest annual drop since the Great Depression” NAR chief economist Lawrence Yun said.  Distressed homes, which accounted for 32 percent of sales last month, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area. For all of 2009, the median price was $173,500, down 12.4 percent from $198,100 in 2008; distressed homes accounted for 36 percent of total sales last year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.93 percent in December from 4.88 percent in November; the rate was 5.29 percent in December 2008.

  • Existing-home sales in the Northeast dropped 19.5 percent to an annual level of 910,000 in December but are 21.3 percent above a year ago. The median price in the Northeast was $241,700, up 3.2 percent from December 2008.
  • Existing-home sales in the Midwest fell 25.8 percent in December to a level of 1.15 million but are 8.5 percent higher than December 2008. The median price in the Midwest was $143,200, which is 1.8 percent above a year ago.
  • Existing home sales dropped 16.3 percent in the South to an annual pace of 2.01 million homes in December from the prior month, but are 15.5 percent higher than in December 2008. The median price in the South was $152,000, representing just a 1.0% percent decline from a year ago.
  • Existing-home sales in the West declined 4.8 percent to an annual rate of 1.38 million in December but are 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.

Lawrence Yun, NAR chief economist, said there were no surprises in the data. “It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,” he said. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.”

Courtesy of HousingZone.com


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