Existing-Home Sales Fall in December, but Up for the Year

Following a surge in sales from September through November, existing home sales-including single-family, townhomes, condominiums, and co-ops-fell in December 2009, according to a recent report from the ""National Association of Realtors"":http://www.realtor.org/ (NAR).

[IMAGE]

This decline in sales was expected, as first-time homebuyers rushed to complete sales before the original deadline for the tax credit. However, NAR's report showed that annual sales improved in 2009, and prices in December increased from a year earlier.

While existing home sales fell 16.7 percent to a seasonally adjusted rate of 5.45 million units in December from 6.54 million units in November, sales remained 15 percent above the 4.74 million-unit level of December 2008. There were 5,156,000 existing-home sales for all of 2009, a 4.9 percent jump from the annual sales recorded in 2008. This was the first annual sales gain since 2005, NAR said.

According to Lawrence Yun, NAR chief economist, there were no surprises in the data. He said it is significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit. As homebuyers take advantage of the extended and expanded tax credit, Yun said home sales will likely have another surge in the spring.

""By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise

[COLUMN_BREAK]

again in 2010,"" Yun explained. ""However, the job market remains a concern and could dampen the housing recovery â€" job creation is key to a continued recovery in the second half of the year.""

The NAR practitioner survey showed that first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. However, repeat buyers jumped to 42 percent of transactions in December, up from 37 percent in November. The remaining sales were to investors.

In December, the national median existing-home price for all housing types was $178,300, 1.5 percent higher than December 2008. Yun said the median price rose because of an increased number of mid- to upper-prices homes in the sale mix. This jump in prices marked the first year-over-year gain in median price since August 2007.

While the median existing-home price increased in December, the median price for all of 2009 did not. The annual median price last year was $173,500, down 12.4 percent from $198,100 in 2008. According to NAR, distressed sales continue to downwardly distort the median price because the properties generally sell at a discount relative to traditional homes in the same area. Distressed sales accounted for 32 percent of sales in December and 36 percent of total sales in 2009.

At the end of December, total housing inventory fell 6.6 percent to 3.29 million existing homes available for sale. At the current sales pace, this represents a 7.2 month supply, up from a 6.5 month supply in November. At the lowest level since March 2006, raw, unsold inventory was 11.1 percent below December 2008 and was 28.2 percent below the record of 4.58 million in July 2008.

""There's a shortage of lower priced homes for sale in much of the country, resulting in multiple bids in some areas,"" said Vicki Cox Golder, NAR president. ""Raw, unsold inventory has been trending down. As the market heats up again this spring, buyers may need to be prepared to move quickly on a particular home.""