| Surprising Rise in Existing Home Sales in December |
| Written by Jonathan Smoke | |
| 01.26.2009 | |
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Discuss this article on the forums. (0 posts) Apparently December wasn’t all bleak for housing. The National Association of Realtors reported preliminary existing home sales for December today, and according to their report sales rose unexpectedly while inventory declined. The jump in sales was led by a surge of sales in the West. Total existing-home sales rose 6.5% 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. That reversed two negative declines, including the 9.4% plunge in November. But compared to December 2007, sales were still down 3.5%. Both condo and single family homes increased over November, but single family homes jumped 7%. As data have been reported on single family home sales longer than condos or the total of both, that 7% jump was significant. We rarely see monthly changes in excess of 5%. The last time we saw such a percentage increase was December 2001. Unlike that post 9/11 period, the surge this time may be in opportunistic or investment purchases as NAR also reported that 45% of current sales are “distressed sales.” While distressed sales don’t clearly signal that home buyers are back, a sale is a sale when it comes to inventories that have been a problem for more than two years now. Total existing housing inventory at the end of December fell 11.7% to 3.68 million homes for sale, or a 9.3-months’ supply. Single family inventories declined even further. The December single family inventory was 3.09 million, down 12.2% from November. That is an 8.7 months’ supply at December’s sales pace. We have a slew of additional data still to come this week, including November’s Case-Shiller Home Price Indices and December’s new home sales and inventory information. I don’t expect the rest of the data to be as encouraging as these existing home sales numbers. Regardless, it is good to see continuing progress on inventory levels. 
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