Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®. Existing-home sales jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008 there were 4,912,000 existing-home sales, which was 13.1 percent below the 5,652,000 transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November. The national median existing-home price for all housing types was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000.
REAL Trends Comment: As we reported in the December REAL Trends Housing Market Report, sales in December were better than expected given the drum beat of negative economic and housing market news. Yes prices are down, nationally somewhere in the 11-14% range, but sales show signs of firming.
Have we reached bottom? With unemployment rising we expect continued downward pressure on sales and prices, but declining inventory and higher affordability may take the edge off substantial further declines in all but a few markets.
Where sales and prices have tumbled the most, the market is more robust. The more brokerage firms insist on accurate pricing among their listings, the less overpriced homes there are on the market, the quicker markets will return to health.
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