Existing Home Sales Plummet In December, But It Was Expected
Just one month after from blowing away Wall Street, December’s Existing Home Sales hit the skids, shedding nearly 17 percent and falling to a 4-month low.
Don’t be alarmed, though. The plunge was expected. And not just because Pending Home Sales cratered last month.
When November’s Existing Home Sales surged, it was clear to observers that an expiring $8,000 federal tax credit was the catalyst. At the time, the tax program was slated to expire November 30 and the looming deadline pushed a lot of would-be buyers from a December time frame into November.
The expiration date has a cannibalizing effect on December’s sales figures. It was only later that Congress extended the tax credit to June 30, 2010.
So, with home sales plunging in December, it’s no surprise that home supplies rose for the first time in 9 months. Home Supply is calculating by dividing the number of homes for sale by the current sales pace.
The national housing supply now rests at 7.2 months.
Despite December’s Existing Home Sales report appearing shaky, it’s actually terrific new for home buyers.
See, for the past few months, as housing has been improving, sellers nationwide have been bombarded by messages of “hot markets” and rising home prices by the media. Psychologically, a seller is more likely to hold firm on price if he believes the housing market is improving and now December’s data is deflating that argument.
This is why we say there’s always two sides to a housing story — the buyers’ side and the sellers’ side. And, usually, what’s good for one party is bad for the other. It’s what we’re seeing now.
Because of soft data like December’s Existing Home Sales, buyers may retake some negotiation leverage that’s been lost since Spring 2009, helping to improve home affordability and, perhaps, spur more sales.
-
Archives
- May 2010 (1)
- April 2010 (21)
- March 2010 (21)
- February 2010 (21)
- January 2010 (9)
- July 2008 (1)
- June 2008 (1)
- May 2008 (3)
- April 2008 (3)
- March 2008 (2)
- February 2008 (5)
- January 2008 (1)
-
Categories
- Case-Shiller Index
- Consumer Confidence
- Credit Scoring
- Daily Updates
- Existing Home Sales
- FHA Mortgages
- Florida Mortgage News
- FOMC
- FOMC Minutes
- Foreclosures
- Home Improvement
- Home Price Index
- Home Values
- Homebuyer Tax Credit
- Household Finances
- Housing Starts
- Jobs
- Mortgage Guidelines
- Mortgage Rates
- New Home Sales
- Pending Home Sales
- Real Estate Investing
- Real Estate Taxes
- Statistics
- Tax Tips
- Uncategorized
- Weekly Review
-
RSS
Entries RSS
Comments RSS