MW: Existing-home sales rise 6.5% as prices plunge
Sales of existing homes rose 6.5% in December to a seasonally adjusted annualized rate of 4.74 million as prices continued to plunge at a record pace, the National Association of Realtors reported Monday.
Sales in December were down 3.5% from the previous December.
For 2008 as a whole, sales fell 13.1% to 4.91 million, the industry trade group said. November and December were the weakest sales months of the year on a seasonally adjusted basis.
The median sales price fell to $175,400 in December, down a record 15.3% compared with a year earlier. For all of 2008, median prices dropped 9.3% to the lowest level since 2004.
The price decline is likely the largest since the Great Depression in the 1930s, according to Lawrence Yun, chief economist for the trade group.
About 45% of the transactions in December were considered distress sales, either a short sale or a home in foreclosure. Many foreclosure sales are handled outside the realtors' system and are not reported in this report.
Sales in December were stronger than the 4.36 million expected by economists surveyed by MarketWatch. November's sales pace was revised lower to 4.45 million from 4.49 million initially reported.
The sharp decline in mortgage rates in recent months probably didn't have much impact on sales that closed in December, Yun said. Home sales typically close two months or so after a contract is signed.
Inventories of unsold homes dropped 11.7% to 3.68 million, representing a 9.3-month supply at the December sales pace, compared with 11.2 months in November. Inventories typically decline about 8% to 10% in December, Yun noted. The inventory data are not seasonally adjusted.
Sales of single family homes rose 7% to 4.26 million, while condo sales rose 2.1% to 480,000. For all of 2008, single-family sales fell 12% to 4.35 million, while condo sales fell 21% to 563,000.
The report comes as signs of a deepening recession mount. Reflecting the weak housing market, Home Depot announced Monday it would eliminate 7,000 jobs and close its Expo home decorating division.
The government will report on sales of new homes on Thursday. Economists surveyed by MarketWatch expect sales to decline about 4% to a seasonally adjusted annual rate of 390,000 in December.
