Existing-home sales tumbled in January, according to the National Association of Realtors
, as buyers were likely waiting to see how details of the economic stimulus package would pan out. Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 5.3 percent month-over-month to a seasonally adjusted annual rate of 4.49 million units, compared to 4.74 million units in December and 4.91 million units in January 2008.
Lawrence Yun, NAR chief economist, said there was understandable hesitation by some homebuyers. “Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” he said.
Single-family home sales in January fell 4.7 percent to 4.05 million, according to NAR, while existing condominium and co-op sales dropped 10.2 percent to 440,000 units in January -- from 490,000 units in December.
NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. Inventory is expected to fall below an 8-month supply by the year-end, which would be consistent with home price stabilization, NAR said.
Inventories in January plunged 2.7 percent, hitting a two-year low of 3.60 million existing home sales available for sale, which represents a 9.6-month supply at the current sales pace. Because sales were down, said NAR, the January supply is up from a 9.4-month supply in December.
The national median existing-home price for all housing types was $170,300 in January, according to NAR's report, down 14.8 percent from a year earlier when the median was $199,800. A high prevalence of distressed home sales, and of those in lower price ranges, has skewed the median price to be markedly lower than under normal market conditions, said NAR in a press statement.
About a quarter of all inventory is listed as being distressed, but NAR estimates that distressed sales – foreclosed or those requiring a lender-mediated short sale – comprised about 45 percent of all sales in January. “Home buyers are evidently competing for homes with deep discounts,” Yun said.
Significant local market variations continued in January. “A majority of markets experienced sales declines of more than 20 percent from a year ago, but some markets appeared to have reached the tipping point of accelerating home buying,” Yun said. “For example, home sales in Las Vegas have more than doubled with some reports of multiple bids.”
Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, 23.8 percent lower than January 2008. Sales in the Midwest fell 5.7 percent in January to a level of 1.00 million -- 16.7 percent below a year ago. In the South, existing-home sales declined 5.7 percent to an annual pace of 1.64 million in January, and in the West, existing home sales were unchanged at an annual rate of 1.20 million in January -- 29.0 percent stronger than a year ago.
Despite near across-the-board drops in January's existing home sales, Yun believes the housing market will soon get a lift from favorable buying conditions – not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits, he said.
Kelly Curran at email@example.com
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