Resales Down 8.1% in '06

Sales of existing single-family homes slipped 1.3% in December and fell by 8.1% for the year (the biggest annual drop since 1989), but 2006 was still the third-best year in terms of sales, according to the National Association of Realtors.The NAR reported that December sales of previously owned single-family homes fell from a seasonally adjusted annual rate of 5.51 million in November to 5.44 million in December. The median single-family home price rose 2.3% in December to $221,600, after declining for three months. For the year, the median price was up 1.1%. However, prices were down 4% since July, when the median price peaked at $230,900. NAR chief economist David Lereah said the "good news" is that the inventory of existing single-family homes, condominiums, and cooperatives fell to a 6.8-month supply, down from a 7.3-month supply in November, and most of the housing market indicators are "favorable." He said most speculators have left the market, and prime homebuyers are coming back in "because they understand it is a buyer's market." Sales of existing condos and co-ops rose 2.1% in December to a seasonally adjusted rate of 770,000 units. Sales are off 8.1% from the level recorded in 2005 and prices are up 0.3%. [Editor's note: The accompanying chart excludes resales of condos and co-ops.] The NAR economist is predicting that overall resales will decline 1.2% in 2007 and prices will edge up 1.4%.