at the lower end
New home sales were the lowest reported since 1963, settling at 331,000 in December. Compared to the same period in 2008, when construction companies sold 482,000 homes, the lowest results since 1982.
Median new home prices also fell to $206,500, a drop of 9.3 percent from December 2008. Excess unsold homes sit at about 357,000; it is estimated that it will be more than a year before the inventory is sold.
The overall picture is divided into a 28 percent drop in the Northeast, a 20 percent drop in the West, and 12 and 6 percent lowers in the South and Midwest.
The rising unemployment rate combined with stricter mortgage requirements has crippled the market for new homes.
The market as a whole lost $3.3 trillion in 2008, with an average of one in six homeowners owing more than their homes were worth. More than 2.3 million homes defaulted or were foreclosed on by lenders.
Average price drops by city include:
Manhattan: -5.8%
Seattle: -12.1%
Portland: -11.7%
AL: -21%
Las Vegas: -26.8%
Phoenix: -22.3%
at the top end
Existing home sales showed an unexpected rise in December, especially from foreclosure deals in California, Nevada and Florida. Sales resulted in a 6.5 percent increase from November; it remains the worst year for real estate in more than ten years. The markets did; however, they exceed the pessimism originally forecast for a drop of 4.4 million. Bargain prices and attractive interest rates seemed to make savvy shoppers sit up and take notice.
Existing home sales in December 2009 were over 4.74 million, up from 4.45 million in November. Median sales prices were $175,400; a drop of 15.3 percent from $207,000 in December 2008. The last time prices were this low was May 2003.
Average price increases include:
Fayetteville, North Carolina: 6.9%
Yakima, Wash.: 6.2%
Utica-Rome, New York: 5.3%
The number of unsold homes on the market was also on the rise in December. This number fell almost 12 percent to 3.7 million. In early February, US homebuilder stocks rose nearly 12 percent, another positive sign that the slide may be leveling off.
It appears that recent activity is not as bad as originally forecast. “Overall, the recent data that has been coming in points to poor economic activity in an absolute sense,” said Myles Zyblock, chief institutional strategist at Royal Bank of Canada. “However, it is coming in (a) less bad than expected and (b) less bad than was indicated a few weeks ago.”