Home Sales Surge In December

A surge in sales volume in the West sent existing home sales on an unexpected upswing and brought inventory down, according to the "National Association of Realtors":http://www.realtor.org (NAR).
The existing home sales annual rate - a statistic derived from what the number of home sales would be for if a particular month's pace was maintained for a year - jumped to a seasonally adjusted annual rate of 6.5 percent from 4.45 million units in November to 4.74 million units in December. That level is still 3.5 percent below the 4.91 million-unit pace in December 2007.
According to the NAR year-end report, there were 4,912,000 existing-home sales, down 13.1 percent from the 5,652,000 transactions recorded in 2007. It's the lowest volume recorded since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall significantly. "It appears some buyers are taking advantage of much lower home prices," he said. "The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future."
Housing inventory at the end of December decreased 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the year-end upswing is a sign that the housing market could rebound given the right conditions.
"We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected," he said. "Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery."