at the bottom end
New home sales were the lowest reported since 1963, settling at 331,000 in December. Compared to the same period in 2008, when builders sold 482,000 homes, the lowest results since 1982.
Median new home prices also fell to $206,500, a 9.3 percent drop from December 2008. Excess unsold homes sit at about 357,000; it is estimated that it will take more than a year before the inventory is sold.
The big picture breaks down as a 28 percent drop in the Northeast, a 20 percent drop in the West, and a lower 12 and 6 percent in the South and Midwest.
The rising unemployment rate combined with tougher mortgage requirements has crippled the new home market.
The overall market lost $3.3 trillion in 2008, with an average of one in six homeowners owing more than their homes were worth. More than 2.3 million homes defaulted or were repossessed by lenders.
Median price drops by city include:
Manhattan: -5.8%
Seattle: -12.1%
Portland: -11.7%
AL: -21%
Las Vegas: -26.8%
Phoenix: -22.3%
at the top end
Existing home sales showed an unexpected increase in December, especially from foreclosure settlements in California, Nevada and Florida. Sales resulted in an increase of 6.5 percent over November; it remains the worst year for the real estate sector in more than ten years. The markets did it; however, they beat the pessimism originally forecast for a drop of 4.4 million. It seemed that the bargain prices and attractive interest rates made savvy buyers sit up and take notice.
Sales of existing homes in December 2009 exceeded 4.74 million, compared to 4.45 million in November. Median sales prices were $175,400; a 15.3 percent drop from $207,000 in December 2008. The last time prices were this low was May 2003.
Median price increases include:
Fayetteville, North Carolina: 6.9%
Yakima, Wash.: 6.2%
Utica-Rome, New York: 5.3%
The number of unsold homes on the market was also up in December. This number fell nearly 12 percent to 3.7 million. In early February, shares of US homebuilders rose nearly 12 percent, another positive sign that the decline may be leveling off.
It appears that the recent activity is not as bad as originally forecast. “Broadly speaking, the recent data that has been coming in points to weak economic activity in an absolute sense,” said Myles Zyblock, chief institutional strategist at Royal Bank of Canada. “However, it is coming in (a) less bad than expected and (b) less bad than indicated a few weeks ago.”