Exisiting Home Sales Surge, Outlook Bleak

January 20th, 2011
in econ_news

house sold Econintersect:  The NAR (Nation Association of Realtors) reported today (Thursday, January 20) that existing home sales surged by the greatest amount in 11 years last month.  The gain from November to December was 12.8%, seasonally adjusted.  The average price was little changed.

Follow up:

However, for the year 2010 sales were less than 2008, the previous low since the real estate bubble burst, and the lowest number of sales since 1997.  In 1997 there were 38 million fewer Americans than today.

There are still negative trends.  From a GEI Analysis article:

Home inventories are higher then last year.  This has rising inventory level YoY has been persistent since the beginning of the 2Q2010.  

From Yahoo New (AP):

The increase was an encouraging sign after a dismal year for home sales, said Mark Zandi, chief economist at Moody's Analytics. But he cautioned against raising expectations for a rapid recovery in housing.

"The job market is still very weak, and unemployment is very high. Until we get more jobs, people will be reticent about buying homes," he said.

Zandi said home prices would fall another 5 percent this year. Sales of previously occupied homes would likely exceed 5 million. That's a slight improvement from last year, he said, but it will probably take until 2013 or 2014 for sales to reach a healthy level of 6 million units a year.

Sources:  GEI Analysis and Yahoo News/Associated Press

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