Existing Home Sales Plummet in December
After a rush of first-time homebuyers caused existing home sales to shoot up from September through November, sales volume took an “expected” crash in December, according to the National Association of Realtors (NAR). However, the year-end total of existing homes sales was up in 2009 compared to 2008, the first annual increase since 2005, according to NAR. For all of 2009, nearly 5.2m existing homes — single-family houses, condominiums and cooperatives — were sold, up 4.9% from approximately 4.9m transactions in 2008. The fall surge in sales was due to the belief that the first-time homebuyer tax credit would expire on Nov. 30, NAR. Congress and the Obama Administration have since extended and expanded the credit into this spring. Sales dropped 16.7% to a seasonally adjusted annual rate of 5.45m units in December, down from 6.54m in November. While a deep decline, December’s rate is 15% higher than December 2008’s rate of 4.74m units. “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,” said NAR chief economist Lawrence Yun. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit.” The national median sales price for an existing home was $178,300 in December, up 1.5% from December 2008, the first monthly year-over-year gain in national median price since August 2007. “The median price rose because of an increased number of mid- to upper-priced homes in the sales mix,” Yun said. According to NAR data, 43% of homes sold in December went to first-time homebuyers, down from 51% in November. Repeat buyers accounted for 42% of December sales, up from 37% of sales in November. Investors conducted the remaining transactions. Distressed sales accounted for 32% of December’s sales total and 36% of 2009’s total sales. The total housing inventory at the end of December declined 6.6% to 3.29m. But the slower transaction rate brought the nation’s housing inventory to a 7.2-month supply at the current sales pace, up from a 6.5-month supply in November. The raw, unsold inventory is 11.1% below its year-ago level and the lowest since March 2006. “There’s a shortage of lower priced homes for sale in much of the country, resulting in multiple bids in some areas,” said NAR president Vicki Cox Golder. “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.” Single-family home sales were at a rate of 4.79m in December, down 16.8% from November’s rate of 5.76m. But that rate is 12.7% higher than the rate of 4.25m in December 2008. For all of 2009, single-family sales rose 5% to nearly 4.6m. The median existing single-family home price was $177,500 in December, up 1.4% from the same month one year ago. For all last year, the single-family median was $173,200, down 11.9 percent from 2008. Existing condominium and co-op sales were at a rate of 660,000 in December, down 15.4% from 780,000 in November but up 34.7% from the rate of 490,000 in 2008. Condo sales in 2009 totaled 590,000 units, up 4.8% from 2008’s total. The median existing condo price was $183,700 in December, an increase of 1% from December 2008. The 2009 median condo price was $176,100, down 16.1% from the 2008 median. The Midwest experienced the greatest regional decline in existing home sales rate in December 2009. The month’s rate of 1.15m was down 25.8% from November, but 9.5% higher than December 2008. The median price in the Midwest was $143,200, which is 1.8% higher than in December 2008. The rate in the Northeast was 910,000 in December, down 19.5% from November, but up 21.3% from December 2008. The median price for the region was $241,700, up 3.2% from a year ago. In the South, existing-home sales dropped to a rate of 2.01m in December compared to November, but are up 15.5% from December 2008. The median price in the South was $152,000, down 1% from a year ago. The smallest decline in sales was in the West, where December’s rate of 1.38m was 4.8% lower than November and up 15% from a year ago. The median price in the West was $236,000, up 2.7% from December 2008. Write to Austin Kilgore.