Sharp Rise In Housing Data, Caveat Emptor
The National Association of Realtors showed a positive surprise on December’s existing home sales numbers. But you shouldn’t be surprised that it comes with a twist. The rate came to an annualized gain of 6.5% to 4.74 million rather than the 4.4 million figure expected by economists. The twist is the price and location where the sales took place.
The median home prices for December came were $175,400.00. Thatrepresents a sharp 15.3% decline year-over-year, and is apparently thelargest drop in prices in the 40-year period tracked. The median pricewas $180,300.00 in November.
Existing homes sales were up 4% in the Midwest, up 7.4% in the South,and up a sharp 13.6% in the West. But sales were down 1.4% in theNortheast.
The good news is that the inventory of existing homes is finally comingdown as some are pulled from the market. The inventory now sits at 9.3months vs. 11.2 months of supply in November.
It looks like 45% of the sales were distress sales, meaningforeclosure, pre-foreclosure, and short-sales. If this is a firming upof the housing market, it is a very soft firming up of that market.Very!
Jon C. Ogg
January 26, 2009