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Economy in Brief

Existing Home Sales Lowest Since 1998, Prices Off 10% Since Peak
by Tom Moeller January 24, 2008

According to the National Association of Realtors, sales of existing single family homes slipped 2.0% during December after a very slight 0.7% uptick in November. The decline was to the lowest level since 1998 and since the sales peak in late 2005, sales were down by roughly one third. For the full year sales fell 13.0% on top of a 7.7% decline in 2005.

Sales including condominiums fell 2.2% last month and ended the year down 22.0% from last December, down 12.8% for the full year.

By region, home sales in the Northeast fell 4.6% (-22.4% y/y) and for the full year were off 7.5% after the 6.9% 2006 drop. In the Midwest December sales fell 1.7%, 10.6% for the full year, while sales in the South ended the year with a 1.0% drop. Combined with a 2.0% fall in November overall sales in the South last year fell 13.0%. The worst of it came out West. The 2.1% December decline pulled sales for the year down 19.2% after a 16.2% drop during 2006. For the full year, sales of single family homes in the West was the lowest since 1998.

The median price of an existing single family home fell 0.4% (-6.5% y/y) in December. It was the fifth m/m decline in the last six months. It lowered prices for the full year 2.8% below the 2006 level, the first full year decline in the thirty five year history of the series. Since the peak early last year, home prices were off 9.9% in December.

Perspectives on Housing and the Economic Outlook from the Federal Reserve Bank of Kansas City can be found here.

The latest Budget Outlook from the Congressional Budget Office is available here.

Existing Single Family
Home Sales
December y/y % November December '06 2007 2006 2005
Total 4,890 -22.0 5,000 6,270 5,679 6,510 7,075
  Northeast 830 -22.4 870 1,070 1,007 1,088 1,169
  Midwest 1,160 -20.5 1,180 1,160 1,334 1,492 1,588
  South 1,970 -20.9 1,990 2,490 2,243 2,578 2,704
  West 940 -24.8 960 1,250 1,094 1,353 1,616
Single-Family 4,310 -21.6 4,400 5,500 4,966 5,708 6,182
Median Price, Total, $ 206,500 -6.5 207,300 220,800 215,642 221,883 217,492
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