Existing-Home Sales Plunge

Existing-home sales -- on a sequential basis -- slipped by 2.2% in December to 4.89 million units, but compared with the same month a year earlier plunged by 22%, according to new figures released by the National Association of Realtors. At the end of December the median national home price was $208,400, a 6% decline from a year earlier. Resales have skidded for a year but worsened over the summer when the secondary market for nonprime loans began to evaporate. "We look for the moderate declining trend to hold through the winter, but we continue to believe that a bottom will be found in the spring," says a research note issued by Greenwich Capital. The Wall Street firm said it does not anticipate a sharp rebound in sales "as is typical after housing cycle bottoms," adding that "we foresee resales dragging along the bottom for an extended period, as the sector continues to work out its pricing and inventory issues." There are 3.91 million existing homes for sale which represents a 9.6-month supply.