NAR:

“Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.

For all of 2009 there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008; it was the first annual sales gain since 2005.”

Don’t read too much into the increase in price — the big drop off in first time buyers likely skewed the purchases away from smaller, cheaper, starter homes.

Looking more closely at the data, a few interesting factors jump out:

• While the monthly data was horrific — down 16.7% — the more important year-over-year numbers were a solid +15%;

• On a percentage basis, the 16.7% monthly decline was the largest on record, dating back to 1968;

• Single-family home sales fell 16.8% (SAAR 4.79 million) and are 12.7% above the 4.25 million level in December 2008.

• For all of 2009, single-family sales rose 5.0% to 4,566,000.

• First-time buyers purchased 43% of homes, down from 51% in November, according to a NAR survey.

• Median existing-home price for all housing types was $178,300 in December 2009 — a gain of 1.5% higher vs December 2008.

• Total housing inventory at the end of the year was down 6.6% to 3.29 million existing homes for sale — a 7.2-month supply;

• Raw inventory is 11.1% a year ago, the lowest level since March 2006;

More data coming later this week . . .

>

UPDATE:

Here is my favorite Housing graph, the NonSeasonally Adjusted Chart for Existing Home Sales


Courtesy of Calculated Risk

>

Source:
December Existing-Home Sales Down but Prices Rise; 2009 Sales Up
NAR, January 25, 2010
http://www.realtor.org/press_room/news_releases/2010/01/december_down

Category: Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

13 Responses to “December Existing-Home Sale Worse Than Expected”

  1. Marcus Aurelius says:

    Here’s a more recent press release from the NAR, in collaboration with the NAHB:

    http://popup.lala.com/popup/360569496709431526

    (I sure hope this link works).

  2. Mannwich says:

    Get ready for “Green Shoots” campaign part deux in about 6-8 weeks.

  3. sharkbait says:

    While the monthly data was horrific — down 16.7% — the more important year-over-year numbers were a solid

    > Solid what? Bowel movement?

    • Single-family home sales fell 16.8% (SAAR of 4.79 million) and are 12.7% above the 4.25 million level in December 2008.

    > The gov’t is the economy. Withdraw stimulus and the bottom is lower. Prices will regress to the long-term trend no matter what the gov’t tries to do (for the banks). Enough cheer-leading already.

    • For all of 2009, single-family sales rose 5.0% to 4,566,000.

    > Bought w/ taxpayer money in the form of tax credits.

    • First-time buyers purchased 43% of homes, down from 51% in November, according to a NAR survey.

    > Tax credit extended out in time…

    • Median existing-home price for all housing types was $178,300 in December 2009 — a gain of 1.5% higher vs December 2008.

    >That’s just about the amount of the housing “tax credit”. Uncle Sam using our money to buy houses that people don’t need. Is anyone actually buying this?

    • Total housing inventory at the end of the year was down 6.6% to 3.29 million existing homes for sale — a 7.2-month supply;

    > Not counting “shadow inventory”.

    • Raw inventory is 11.1% a year ago, the lowest level since March 2006;

    > Not counting “shadow inventory.”

    Spin, rinse, and repeat. Extend, and pretend.

    ‘There are three kinds of lies: lies, damned lies, and statistics.’” – Mark Twain

    my $0.02

  4. The Curmudgeon says:

    • While the monthly data was horrific — down 16.7% — the more important year-over-year numbers were a solid

    ~Thus proving once and for all, that if you want sell more of something, reduce its price, the obverse when you want less of something, you tax it.

    I wonder what a “real” market in residential real estate might look like. Remove all the government goodies, like subsidized low interest rates (via $1.25 MBS purchase program, et al), tax deductions for mortgage interest, outright tax credits for buying a home, Fannie and Freddie and Ginnie Mae to funnel and guarantee purchases of crap MBS paper, etc., and then let’s see what the price and activity might look like.

    I bet we’d spend fewer Saturdays at Home Depot and Lowe’s picking up stuff for “investing” in our homes.

  5. Mannwich says:

    What’s interesting (and amusing) is that when the year over year numbers suck, they emphasize the month over month numbers. I love it. What happens when BOTH suck? What positive spin do they pull out of their arse then?

  6. alfred e says:

    @BR: Man you just flushed your credibility down the toilet.

    Yeah, sure, all you did was quote other peoples’ numbers.

    But didn’t you just write a book about how other peoples’ data sucked.

    Housing prices down another 20% or more. Bank it.

  7. [...] December existing home sale worse than expected -  The big story today is about how December existing home sales were off by almost 17% compared to November.  This comparison is almost completely useless since November was the original expiration of the homebuyer tax credit and home sales are seasonal.  In other words, a 17% decline is probably better than expected.  Barry Ritholtz actually digs in and finds some more useful comparisons on the housing data.  As for Allegheny County, December sales were off by a substantially larger margin which is reason for concern.  More on this in a separate post later. [...]

  8. DeDude says:

    The graph would suggest that the normal fall in sales seen from August to January has been a little late this year. Question is how much of that is true business cycle and how much is stimulus (of different kind).

  9. bsneath says:

    After eyeballing the trajectories of the above chart and others on CR’s site, such as # of months of inventory, it appears that housing will not recover for about another 12 months.

    I recall the conventional wisdom at the beginning of our economic crisis was that the economy will not recover until housing recovers.

    This says to me that the economy will still need the stimulus props (deficit spending and quantitative easing) for one more year to avoid a depression-like outcome. However it is not likely to happen. The public (and therefore the politicians) are not in much of a mood to continue either of these programs.

    The same thing happened in the 1930s. The government raised taxes & cut budgets too early and the result was 5 more years of depression like conditions.

  10. DeDude says:

    alfred; a good investor believe in facts and question his own biases, not the other way around ;-)

  11. lalaland says:

    Yeah, but wait until the January data comes through – probably not much different month-after-month but a huge YoY since Jan 2009 was the worst of the worst (maybe 380k sold vs. 280k for 01/09).

    Barring any bad news on the release date, I predict a rally on 2/25 or whenever the numbers come out – you heard it here 1st

    Also, I’m going out on a limb: kelly green for 2010 bars?

  12. DeDude says:

    lala; I think 300K for January with 280K as my low surprise level and 330K as my high surprise level. I know there is a new stimulus crowd on the buy side but that trend is swimming upstream against the fall of byers from the first stimulus and probably wont come out until spring anyway (unless rates start increasing).

  13. DeDude says:

    Barry, I love that graphic too. But a real winner would be a similar presentation set up as a 3D barrel graphic with a timeline underneath that allowed you to “roll the barrel” so you can avoid the annoying break when you focus on periods spanning December and January. That’s what I want for my birthday uncle Barry ;-)