NAR's Existing Home Sales Data Shows 16.7% Drop in Dec.

"Plunge", "Plummet" and "Nosedive" are terms that are peppering the headlines of online reports of the latest release of existing home sales data by the National Association of Realtors this morning. NAR reported that the annualized sales rate for single family homes in December fell 16.7% from November. But the important point to take away isn't that December was so bad, but that October and November's sales data was so pumped up largely due to the anticipated expiration of the first time home buyer tax credit on Oct. 31st. (The tax credit, which has since been extended to April 2010, was scheduled to expire on Oct. 31st. That had a significant impact on October and November sales figures, because a property had to only be in contract by the deadline date, but could close after that date.)

In fact, December's annualized sales rate of 5,450,000 homes was up 15% from December, 2008 and only off about 4% from the hot market year of 2007! Was anybody seriously thinking that the November sales rate could actually be sustained? To tell the truth, I was actually heartened by today's numbers, that the sales rate remained as high as it did without the huge impact of the tax credit. Sure, the tax credit was extended and is probably having some ongoing stimulating affect, but the big rush of first time home buyers to get in under the old deadline has dissipated.

On the price front, the picture is lackluster at best. Nationally, the median sales price was up only 1.5% from a year earlier, although did rise 4.8% from November. Price bulls, though, shouldn't read too much into the November to December rise in prices. If November's sales numbers were skewed up by first time home buyers, it's important to keep in mind that those first time buyers tend to purchase lower priced houses.

Comments

[Bix]

A bit off topic, but related to property values: ProPublica on spills aplenty at Penna. gas well http://www.propublica.org/feature/pas-gas-wells-booming-but-so-are-spills-127

[Bix]

Yeah, that's a pretty awful situation, and it shows how frozen the market is.

You know, I was just looking at comparables for my house (kindly provided by David's able colleague Kathy Rieser), as I am considering refinancing, and I must say that I was blown away. If I were looking at my house as a buyer today, I would have *no* objective way of knowing how much it's worth. There have been so few sales in my area that it's just impossible to say. Appraisers would have the same issue. It's a mess. It reminds me of the bond market during the Long Term Capital fiasco. No buyers, so no market price.

[Mike in Barryville]

Folks (and, of course Dave), here are the numbers since we can now put January 2010 to bed and they are not good - with regards to median sold price and monthly sales.

The median continues to drift lower into the lower 120's (if you add November 2009, December 2009 and now January 2010) as well as volume.

Have a look.

Mike in Barryville

============================
January 2010
============================
Houses SOLD - 33
============================
Median Price SOLD: $110,000
============================
Percentage of SOLD Houses in
Western Sullivan Co
(West of NY Route 17)
{more second home area}

12 Houses or 36%
============================
Percentage of SOLD Houses in
Thompson, Liberty, Fallsburg
Wurtsboro
{more primary home / some
second home}
15 Houses or 45%

=============================

+++++++++++++++++++++++++++++++++++++++++++++++++

============================
December 2009
============================
Houses SOLD - 42
============================
Median Price SOLD: $119,000
============================

[David Knudsen]

Mike in Barryville, we're not singing out of the same hymnbook. I show 32 single family homes in Sullivan County sold in the MLS in January, with a median sales price of $129,200, not 33 with a median of $110,000. I think a difference may be how we define "Houses". I only use Single Family, and don't include seasonals, condos or 2 families. Just SFR's. But even then, there is still a wide gap between what you posted and what I'm finding. I'm showing both the median and average actually up in January over December, on a single month basis. But I've repeatedly cautioned about the tenuousness of single month data. There can be wide shifts on a single month basis, because of the very small sample sizes. And that's why I always look at 3 month samples, and then look at single month data within that to get a feel for where the trend may be moving. For the 3 months ending Jan. 31st '10, it looks like we're going to end up around $134K for the median, just about where we've been since September. Pricewise, I think we're just drifting around laterally, without any big trend in either direction, down or up. I'm just not seeing the data support the pessimists with their Armageddon, sky is falling prophecies, nor the overly hopeful looking for signs of a price rebound.

[mike]

I think you'd better add it up again for Jan. 2010.

Mike

in Barryville

[David Knudsen]

I did just run it again. In the Sullivan MLS, when I input:
Sullivan County Single Family Status: Sold from 1/1/2010 through 1/31/2010, I get 32 sales with a median price of $129,200 and an average price of $171,229. The median drops a bit to $118,500 and the total number of sales increases to 33 if I include seasonals. I can get it to come up as $110,000 if I include both seasonals and rentals, not just sales. (35 total). Check your search results. If either MLS 26229 or 27818 are in the results, you've included rentals — and the result isn't a valid median sales number, when an $800 rental is included.