December home sales down nearly 17 percent

[The Northerner]

Source: Associated Press

WASHINGTON (AP) -- Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

"It's 'exit stage left' for first-time homebuyers," wrote Guy LeBas, an analyst with Janney Montgomery Scott.

December's sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.

Read more: http://finance.yahoo.com/news/December-home-sales-down-apf-2729493334.html?x=0&.v=6

[Arctic Dave]

1. Wow, this is totally out of left field.

Or not.

[CountAllVotes]

2. this is very bad news

especially those stuck in houses they paid $500,000+++ for here in Calif.

And to those that say revoke Prop. 13 - it is Prop. 13 that is keeping these people in these houses that aren't worth but 1/4th of what was paid for them.

That would literally KILL the real estate market in Calif. if Prop. 13 was revoked (which won't happen anyway).

:kick:

[flyarm]

3. ahhh but weren't the cheerleaders on here not long ago telling us how GREAT the economy was getting?

yeah..they were!!

eom

[leftofcool]

4. Home sales are always down in December

It's Christmas, it's winter, it snows....nuff said

[salib]

5. I guess there were no Decembers / Christmases / Winters / Snows

In the past 40 years, right?

"Sales of previously occupied homes took the largest monthly drop in more than 40 years last month...."

Silly comment about Christmas, winter, snow, etc.

[caseymoz]

13. delete - wrong place.

We didn't have a snowstorm that would cause a 16.7 percent drop. The major ones we had took place mostly between Christmas and New Year's, when nobody closes on a house anyway.

The recovery has been overstated. The only ones who have recovered are Wall Street and the Banks, mostly with our money.

[caseymoz]

14. That's why it says "seasonably adjusted."

Besides, we didn't have a snowstorm that would cause a 16.7 percent drop. The major ones we had took place mostly between Christmas and New Year's, when nobody closes on a house anyway.

The recovery has been overstated. The only ones who have recovered are Wall Street and the Banks, mostly with our money.

[closeupready]

6. Just reflects that demand for housing is artifically inflated by these credits and the MI deduction

All this means is they will find another gimmick at taxpayer expense to artificially inflate demand even further into the future.

[WriteDown]

15. Bullseye. nt

[caseymoz]

17. What it also means is . . .

The price of homes has further to fall to meet demand, which is going to do horrible things to the economy.

So, which would you rather have?

[closeupready]

19. I don't know, and so you see, it's not quite that simple is it?

Just going with the corrupt SNAFU we have always just taken for granted.

[Dr.Phool]

7. On another note.

The November durable goods report said that orders increased by 0.2%.

Ooops. They found a statistical error, which should have been obvious.

The revised number is DOWN 0.7%. Fudging numbers and propaganda, anyone?

[skoalyman]

9. I hear ya doc

its the new hope we can make believe in :party:

[cbdo2007]

8. Here is an interesting graph showing existing home sales by month from 2005-2009

http://www.calculatedriskblog.com/2009/11/existing-home-sales-graphs.html

[truthisfreedom]

10. So January and February are going to be much worse.

If we stick to the pattern.

[cbdo2007]

11. Headline from a month from now - "January 2010 Existing Home Sales Fall 10%!!!"

Everyone will be shocked unless they know how to read graphs. :)

When used out of context you can really make just about any numbers sound bad.

[caseymoz]

18. It was already "seasonably adjusted" though.

They already took the season into account.

I'm afraid this news is as bad as it looks.

[truthisfreedom]

21. Sales in Dec '09 were about 17% lower than November '09, but 15% higher than December '08.

It's very complicated. BUT, this graph shows how steep the fall is right now, and you can see a very long history to compare it to. So maybe something scary is happening. I don't pretend to know.

http://tinyurl.com/yzfobfd

[noamnety]

20. And six months from now

housing sales will be up for summer, which will be attributed to Obama playing chess.

[DallasNE]

12. December Was A Brutal Weather Month

And weather also affects home sales. Plus, this is a volatile number anyway due to the small numbers involved.

[caseymoz]

16. Almost all the bad weather was between Christmas & New Year's.

Where very few houses would have moved anyway.

[TexasObserver]

22. Home sales are being driven almost solely by the tax credit.

Without the tax credit, these deals don't get made, don't get funded, and don't get closed.

As soon as the extension for the credit was done, the entire market responded, but there were no closings set for December, except those that got pushed over to December AFTER the extension of the tax credit to April was announced. I think we'll see good numbers by March and April.

This demonstrates how critical to the economy the home purchase tax credit has been. The cash for clunkers was likewise important, and so was the stimulus package. They all helped infuse money into the economy, and we need them to be extended through 2010.

[DeadEyeDyck]

23. As they say in the market

more sellers than buyers