Housing Sales Up a Surprising 6.5 Percent in December

Published by peter | Filed under Market Trends, Real Estate

Despite the gloom and doom you may hear on the nightly news, the housing market actually may soon be in recovery.  This is evidenced in the latest report that says housing sales were up a surprising 6.5 percent in December.

Existing-home sales climbed 6.5 percent to a seasonally adjusted annual rate of 4.74 million in December, according to the National Association of Realtors. That was better than analysts expected. Sales fell 3.5 percent compared with December 2007.

These “are steps in the right direction, but the market is still far from normal, balanced conditions,” said Lawrence Yun, NAR’s chief economist.

Still, others says they have reason to be optimistic.  “I think Americans love a bargain and I think that is what we saw last month,” said Mike Larson, housing analyst for Weiss Research. “The real question is whether that momentum can be sustained, especially since almost every day you hear about more layoffs. If the jobless rate keeps going up, that is going to trump any impact of lower prices.”

But if President Obama’s stimulus plan is quickly implemented, and joblessness decreases, won’t that immediately help the housing market?

More importantly, prices appear to have fallen enough in some regions - especially in trendsetter California - to make buying cheaper than renting.  And with record low mortgage rates, demand has started to rebound and may only increase in the short-term.

“You can now own a home in several areas for less than it costs to rent,” said Mollie Carmichael, senior vice president with John Burns Real Estate Consulting, an Irvine, California-based consultant to the real estate industry.

 I can’t help but think that if California’s real-estate market is beginning to turn the corner, Florida’s can’t be too far behind, especially as another cold winter drives millions of tourists to the Sunshine State.  While on vacation, those tourists may be inclined to take a look at a seasonal residence.

 Actually, the data for Florida is a mixed-bag: Five of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales for year-end 2008; at the same time, four MSAs showed gains in existing-condo sales. December marked the sixth consecutive month that a number of Florida markets noted higher sales activity.  I’ll discuss more of that in my next post because I want to take a moment to really get inside the numbers