Resales of homes and condos in the US spiked higher in December, led by record price declines and a surge of sales in the West. The US housing market as a whole improved significantly during the last month of the year, as both inventories and mortgage rates plunged. Sales rose from a seasonally-adjusted annualized rate of 4.45 million in November to 4.74 million in December. The number was above expectations, as economists estimated sales at a rate of 4.36 million. Resales of US homes have fallen 3.5% in the past year.
Regionally, existing-home sales in the Northeast slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
Existing-home sales in the Midwest increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
In the South, existing-home sales rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8.0 percent from a year ago.
Existing-home sales in the West jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
The good news:Inventories of unsold homes fell for the month, down 11.7% to 3.68 million units for sale. That represents a 9.3-month supply, well below the 11.2-month supply in November.
The median sales price fell to $175,400 in December, down a record 15.3% compared with a year earlier. The faster prices fall, the faster inventories are cleared out and prices stabilize.
Sharp declines in mortgage rates in the past few months probably didn’t have any affect in today’s report, according to the National Association of Realtor’s chief economist, Lawrence Yun. So the increased demand due to the significant decrease in the cost of borrowing has yet to be felt.
The bad: 45% of existing home sales were foreclosures.
For 2008 as a whole, sales fell 13.1% to 4.91 million, the lowest since 1997.
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