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Real Estate, Homes, News, Statistics and more

Existing Home Sales Plummet In December, But It Was Expected

Posted by UtahCribs, Real Estate, Homes on January 27, 2010

This is an article from a fellow Loan Officer “Josh Mettle”. Very informative, the important part of this article is that for buyers currently in the market, this will help with negotiations.. For sellers? Take note, lower your price to the market analysis and sell your property. 2010 is going to be a rough year just like 2009, I am not going to even begin to predict what is ahead once the tax incentives go away… Scary…

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 crateredlast 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 news 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.

In the Salt Lake Metro Area, Single-Family Home Sales were up 36% in the Fourth Quarter.

Sales of single-family homes in Salt Lake County were up 36.2 percent in the fourth quarter compared to the same quarter last year. There were 2,403 homes sold, up from 1,764 homes sold a year ago. Last year at this time fourth quarter sales were down 21 percent.

Nearly every area of the Salt Lake Valley reported double-digit increases in single-family home sales. In Draper (84020) home sales soared by 51.7 percent. In Midvale (84047), sales were up 108.8 percent. In Herriman (84096), sales rose by 42.3 percent. In West Valley (84128), sales were up 38.5 percent. Areas of downtown Salt Lake City also saw big increases in sales. Sales in the Avenues (84103) were up 41.7 percent.

Driving the home sales was the $8,000 federal home buyer’s tax credit and more affordable home prices. In the fourth quarter the median single-family home price fell 7.6 percent to $221,650, down from $239,950 a year ago.

Spencer Janke
fax 801-326-4763

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