Existing Home Sales - February Report
Last Updated: 2/2/2010
Home Sales Pace
As predicted, sales of existing U.S. homes plummeted downward in December coinciding with the original deadline for the government’s first-time homebuyer tax credit program.
According to the National Association of Realtors, total sales of existing homes dropped 16.7 percent to a seasonally adjusted annual rate of 5.45 million units, down from 6.54 million in November. On a year-over-year basis, sales were up 15 percent from a pace of 4.74 million homes in December 2008.
"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 Lawrence Yun, NAR chief economist. "We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year."
Homes sales for the 2009 year totaled 5,156,000 units, a 4.9 percent increase from 2008 and the first yearly gain since the peak of the housing boom in 2005.
Home prices in December increased on both a monthly and yearly comparison, with the national median price rising to $178,300. That is 1.5 percent higher than the December 2008 price and up from November’s price of $172,600.
The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc. to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.
Sales Pace by Region
Sales of existing homes fell in every region of the country during December, with the Midwest posting the greatest decline. Sales there fell by 25.8 percent to an annual level of 1.15 million units. On a yearly basis though, sales are up 8.5 percent.
The Northeast was the next hardest hit with a 19.5 percent drop in sales to 910,000 homes, yet this figure is up 21.3 percent over December 2008.
Sales sank by 16.3 percent in the South from November to an annual pace of 2.01 million. Still on a year-over-year comparison, sales there are up 15.5 percent.
The West fared relatively well during December, with sales only slipping down 4.8 percent from the previous month, to 1.38 million units. Sales are up 15.0 percent from one year earlier.
Home Prices
The median home price, the point at which half of all homes are sold for more and half are sold for less, rose in all regions on a monthly basis and in all but the South on a yearly comparison.
In the Northwest, the median price rose to $241,700 from $223,400 in November, and the new price was up 3.2 percent from December 2008.
The Midwest saw a price appreciation to $143,200 in December from $140,800 the month before. The median price also rose 1.8 percent above the previous year’s price.
In the South, the median increased to $152,000, up from $151,400 in November. That new number however, represents a 1.0 percent decrease from one year earlier.
The median price in the West climbed to $236,000 in December, from $231,100 the month before and is up 2.7 percent over the same month in 2008.
Inventory
Housing inventory was down again in December, falling 6.6 percent to 3.29 million homes for sale. At the current sales pace, that represents a 7.2-month supply, an increase from November when there was a 6.5-month supply. On a yearly basis, inventory is down 11.1 percent and is at its lowest level since March 2006.
Next Report
Data for January existing home sales, prices, and inventory will be available at the end of February.
Month-to-Month Appreciation Graphs, regional and nationwide - click here.
