Existing-home sales fell from December to January but were still above year-ago levels, the ""National Association of Realtors"":http://www.realtor.org/ (NAR) reported Friday.[IMAGE]
According to ""NAR's report"":http://www.realtor.org/press_room/news_releases/2010/02/ehs_january2010, existing-home sales -- including single-family, townhomes, condominiums, and co-ops -- declined 7.2 percent to a seasonally-adjusted annual rate of 5.05 million units in January 2010, down from a revised 5.44 million units in December. Despite the month-to-month drop, sales remained 11.5 percent above the 4.53 million-unit level recorded in January 2009.
Lawrence Yun, NAR chief economist, said most of January's sales were based on contracts from November and December. He explained that potential buyers who got into the market after the homebuyer tax credit was extended in November have only recently started to offer contracts, and due to the delay between shopping and closing, it will take a couple of months to complete those deals.
""Still, the latest monthly sales decline is not encouraging and raises concern about the strength of a recovery,"" Yun said.
NAR reported that existing-home sales varied by region. The smallest month-to-month decrease was seen in the West, where sales declined 5.2 percent to an annual rate of 1.28 million. The most notable monthly drop was in the Northeast, where sales plummeted 10.9 percent to an[COLUMN_BREAK]
annual pace of 820,000. However, sales in this region were 22.4 percent above January 2009 levels, marking the largest year-over-year increase.
At the end of January, total housing inventory fell 0.5 percent to 3.27 million existing homes available for sale. Due to the current sales pace, this represents a 7.8-month supply of backlogged homes, up from a 7.2-month supply in December. On a year-over-year basis, this inventory has plummeted 9.6 percent and is at its lowest level since March 2006.
""Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory,"" Yun said. ""With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country.""
Unchanged from a year ago, the national median existing-home price for all housing types was $164,700 in January. NAR said distressed homes, which accounted for 38 percent of transactions in January, continued to downwardly distort the median price because these properties are typically discounted in comparison with traditional homes in the same area.
Regionally, prices fared the best in the Northeast and decreased the most in the West. Year-over-year, the median price in the Northeast increased 8.8 percent to $245,300, representing the highest overall median price in the four regions tracked by NAR. In the West, the median price fell to $203,400, down 5.8 percent from a year ago. At $130,300, the lowest overall median price was in the Midwest, but this was only a 1 percent drop from last year.
According to a parallel NAR survey, first-time homebuyers purchased 40 percent of homes sold in January, down from 43 percent in December. Investors accounted for 17 percent of transactions, up from 15 percent the prior month, and the remaining sales were to repeat buyers. The survey also showed that buyer traffic increased 9.4 percent in January.