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Just call the December 2008 existing home sales data an upside / downside report: On the upside, sales rose 6.5% to a seasonally-adjusted annualized rate of 4.74 million units, the National Association of Realtors announced Monday. On the downside, the median sales priced plunged a record 15.3% compared to a year ago to $175,400. Economists surveyed by Bloomberg News had expected December 2008 existing home sales to total a 4.4-million-unit annualized rate.
Further, for all of 2008, median prices declined 9.3% to their lowest level since 2004. Also in 2008, existing home sales totaled 4.91 million units, a 13.1% drop from 5.65 million units sold in 2007. The 4.91 million 2008 total is also the lowest since 4.37 million units were sold in 1997.
One unqualified bright spot: home inventories, which declined 11.7% to 3.68 million units, or about a 9.3-month supply at current sales rates, down from an 11.2-month supply in November 2008.
Housing Sector / Economic Analysis: The recession -- and the financial crisis, for that matter -- began in housing; perhaps the recovery will begin there, as well. Prices continue to decline, but the decrease in existing home inventories is a positive: if inventories continue to decline in the coming months, that could signal better days ahead in construction. Inventories of both existing and new homes must decline further before home builders can consider increasing construction. Stay tuned.
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Reader Comments (Page 1 of 1)
1-26-2009 @ 11:14AM
Iridium said...
The decline in inventory is due to people pulling thier houses out of the market.
If you took the spot areas in CA where there have been booming forclosure sales the overall picture would probably look worse than the report.
I also disagree that housing prices must stabilize or go up for the economy to recover. Housing costs must continue to go down for the economy to recover. Prices are still 30% above the long term trend in most areas. Until prices fall to a realistic level based on personal income, the economy will not recover.
People are still insane thinking they can get $250k for a house that is half the size of a house that just sold for $145k two doors down.
The vast majority of the generation under 35 years old can not afford a house above $150k. The problem is that most areas where you would want to live and raise a family the median price is far above $200k.
Figure it out people. You can't have a generation that can barely afford to live, and is also making far less than the previous generation purchase the overinflated houses needed to stabilize the market.
1-26-2009 @ 12:26PM
BHarrison said...
The housing market will be somewhat like the stock markets . . . one step forward, and two steps back . . . as foreclosures increase as unemployment increases, the housing markets will continue to decline; that is inevitable. At best, it will take three years for the housing markets to "bottom out" and for recovery to begin. You can forget all of the "propaganda" that is being put out . . . the economics of the situation will determine what is occurring.
In spite of anything that may be done by government and/or business, it will be the "natural economics" that will determine the outsomce of all of this . . . That will be the Laws of "Supply and Demand", and the American people's abillies to finace the purchases. No amount of "manipulations" can effectively get around thsoe considerations.
We will be fortunate if the market bottoms out in three years . . . we simply do not have the qualified buyers to support what has been produced. And the profits have been skimmed off by the FIs, the Developers, and others who may or may not have lost their profits in other investments and ventures.
1-26-2009 @ 2:07PM
David W. Huston said...
Just last week, there were multiple articles to the effect that banks aren't putting foreclosed properties up for sale, at least not in a timely way. Soooooooo the qualifier is that the inventory of foreclosed homes for sale would be MUCH higher if the banks were trying to sell their foreclosed inventory.