Existing home sales up 6.5% for Dec?

all detes not out yet, but...crazy seasonal adj factors for dec, low rates, foreclosure sales...more detes will be available in 15 minutes or so on most services

Here's your reason why- 15% price declines, mounting foreclosures, and generally low rates:

U.S. Existing Home Sales Rise on Record Price Slump (Update1)

By Bob Willis
Jan. 26 (Bloomberg) -- Sales of previously owned homes in
the U.S. unexpectedly rose from a record low, propelled by the
biggest slump in prices since the Great Depression as
foreclosures surged.
Purchases rose 6.5 percent to an annual rate of 4.74 million
from 4.45 million in November that was less than previously
estimated, the National Association of Realtors said today in
Washington. The median price dropped 15 percent from a year ago,
the biggest decline since records began in 1968 and probably the
biggest in seven decades, according to the group.

* US December existing home sales rose to 4.74mn (consensus 4.40mn). This is up 6.5% from November, which was revised down to 4.45mn from 4.49mn
* The National Association reported that distressed sales (either homes in foreclosure or sellers with negative equity) accounted for 45% of transactions. The was the same proportion as in October and November but up from around 10% in normal times
* The large number of distress sales at discounted prices is putting significant downward pressure on the median sales price, which fell to -15.3% year-on-year, from -13.6% in November. This is the biggest yearly price drop on record, going back to 1968
* Most of the foreclosure sales are occuring in the West, which had the biggest rise in sales in December (+14%). Sales are up 36% year-on-year, compared with declines of 5% to 10% in the other three regions
* The rise in sales combined a 12% fall in the number of homes available for sale finally helped reduce the months supply of homes for sale. This fell to 9.3 months from 11.2 months and is at the lowest since June 2007. Reducing this overhang is critical for removing the extra competition for new home and eventually jump-starting construction activity
courtesy of HSBC

The 15% drop in year/year prices reported in the article might have something to do with the increase in sales.

"Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market."

http://finance.yahoo.com/news/December-existing-home-sales-apf-14153279.html

I didn't think Dec would come in so favorable. Until today's news, I thought January was the first month since Aug 08, that buyers were starting to look. Anyhow, that's good news and from the recent local broker blogs, it looks like Manhattan buyers are also out and about looking and signing contracts. IMO it's a Smart Move.

I am surprised that the naysayers like Steve and NYC10022 have not yet jumped in to say that this data is skewed etc etc.

I cant wait until the good news actually starts to come regularly. Those idiots will have nothing to post about besides about how they want to buy but cant afford it because they tried to time the market and failed and how they hate sending so much money to their landlords.

SteveF: I think your comment is associated to the wrong thread, If you hade posted it CalifStreeteasy.com then ok...But this thread is about NYC. Nothing sexy in this report, sorry.

Just a quick note to inform you that the Curbed Marketplace, our go-to spot for apartment listings and new developments, enjoyed record traffic on both this past Saturday and Sunday. Brokers or FSBOs who'd like to have properties join the fun should start here; real estate firms and developers are welcome to email us to discuss package discounts. Alrighty, as you were. [Curbed Marketplace]

today on Curbed.com for NYC.

petrfitz....you're right, stevejhx has been eerily quiet these past couple of weeks.
He probably got a promotion from Streeteasy.

> I am surprised that the naysayers like Steve and NYC10022 have not yet jumped in to say that
> this data is skewed etc etc.

Its not skewed... and the non-skewed numbers show record price declines. This pretty much gels with everything I've been saying, so not quite sure what your point is.

You think the declines were even bigger? Remember, NATIONAL declines have been pretty rare... so numbers of this magnitude are, well, horrific.

Separately, I heard a stat for a couple weeks back (I believe it was the last round of these numbers) that 2/3 of sales were foreclosures. And of course sales have to come up eventually, coming off such low numbers and with prices dropping like mad (and foreclosures).

> I cant wait until the good news actually starts to come regularly. Those idiots will have nothing to > post about besides about how they want to buy but cant afford it ...

Seems to me that the idiot here is the one looking at the stat showing a greater than 15% YoY national decline is the sign of... well, increasing prices.

No spin here, just somebody in denial.

> The 15% drop in year/year prices reported in the article might have something to do with the
> increase in sales.

> "Buyers were taking advantage of dramatically lower prices, especially in distressed markets like
> California, Florida and Nevada, where foreclosures have swamped the market."

Yes, but don't tell Pete... because he thinks the increased sales somehow mean price rises...

whoops.

nyc10022, absolutely right on that. It takes a considerable amount of spin to label this as really good news, or some kind of sign that Nov/Dec was a bottom. Sales never fully dwindled to 0, but they were/are very slow, so I'm not even sure how much stock I would put in percentage changes.

Well, given that we were really only talking about volume changes originally as a predictor for price changes to come, its a little wacky to use a stat showing that the price declines are in to go back and say "see, sales are back, so the claim that low sales mean low prices is wrong".

So, in short, stupid, stupid logic.... but, hey else can we expect from rufus?

And, absolutely on the % change piece. A 50% increase after a 98% decrease really doesn't matter. That isn't even a bounce.

So is took a 15% price reduction nationally to move 2 months worth of supply. Now there's only 9 months of supply nationally. Another 15-20% cut in prices and things might start to stabilize.

I am probably missing a large piece, but how are these numbers good? Furthermore, the "x month worth of supply" metrics is really misleading.

From where I stand the collapse of the housing bubble destroyed a lot of demand. Whole categories of people probably will not buy for the next few years. Examples -- h-buyers waiting until their current BK/FC is expunged, investors who won't go long in a downtrend, new grads that cant find job and those who have a job but cant swap houses for whatever fear-related matters. The board will probably correct / add to this list.

Sooo, as we have a shrinking rate of consumption -- term is absorption, right? -- the "only 9 month of supply" could actually mean that even not a single other house comes available the inventory wont clear for the entire 24 month because there are simply no buyers out there.

Should not they adjust the annual supply as the absorption rate drops (i.e. homes no longer go at natural rate of say 100k houses a month but rather 30k).

Or am I dead wrong? If so, please, do take a moment to explain.

LMAO 80sman.... yeah, they told me they were gonna chop off both my legs to my hips.. well now it's only to mid-thigh...

Hey Petridish... how's the underwear design/landlord/left brain/right/brain/golf going?

I'll be taking all questions for Steve... until he gets back from "How to make your own Commodes" class at new school.

ShortRegrets, you never know, there might be some serious buying activity if the average home price nationwide drops to the $100K level. Maybe the fad for '09/'10 will be laid off junior bankers pooling their severances and buying homes in Nevada and California.

w67, don't forget sneakyPete and Your_Landlord. I forget which one of them owns a home in Nevada...

From Robert Young, Citi's analysis on yesterdays existing home sale numbers:

"Existing Home Sales Really Up, or Is Reported Rise Due to Seasonal Adjustments?

December existing home sales were reported up +6.5% from November. However, it appears that the
National Association of Realtors (NAR) is not fully accounting for business day count changes in making
their seasonal adjustments. If we account for a larger December 2008 day count, then we find
December 2008 home sales to be unchanged from November home sales.5
This does not contradict the notion of lower home prices spurring home sales. We have previously pointed
out how dramatically lower California (CA) home prices have led to large increases in home sales, even if many are foreclosure/short sale distressed sales.6 In fact, while the rate of decline in CA metropolitan area home prices remains very negative, the Case-Shiller November rate of decline slowed by 7%-8% annualized from October (in contrast to an unchanged rate of decline for the overall 20-City Index) – see Figure 7.

Another issue is the reported drop in inventories – inventories typically fall in December from November
because fewer people want to show their home during the holidays.7 This is consistent with the fact that
the November to December drop in existing home inventories (from 4,163 to 3,676 thousand units)
significantly exceeded (by 123 thousand units or 34%) the number of home sales that actually occurred in
December 2008 of 364 thousand units.

Bottom line is that the December 2008 existing home sales report is not as positive as some are
interpreting it to be. Furthermore, the November-to-December month-on-month drop in median
home price of -2.7% unannualized does not appear to be good news, although the drop was a bit
smaller than the -3.3% drop seen in November."

More good news petrfitz,

just out from BBERG:

By Daniel Taub
Jan. 27 (Bloomberg) -- California home prices plunged 42
percent last month as the U.S. housing slump deepened and
foreclosures hit record levels.
The median price for a single-family home in the most
populous U.S. state dropped to $281,100 from $480,820 a year
earlier, the California Association of Realtors said.
Sales rose 85 percent last month. The number of existing
single-family detached homes sold jumped to 544,580 on an
annualized basis from 294,520 a year earlier, the Los Angeles-
based association said today in a statement.

Nice jake.. :)
80sman... no he doesn't have all those aliases... who's got the time except an underwear designer/cirque du soleil set designer living in Las Vegas with a pole dancer as a neighbor to his left and a MMA fighter to his right :)