Sellers & Buyers Realty USA Real Estate News

The National Association of Realtors said sales of existing, or previously owned, homes fell 0.8% in December from the previous month to a seasonally adjusted annual rate of 6.22 million units. For all of 2006, sales of existing homes totaled 6.48 million. That was down 8.4% from 2005 and was the largest annual decline since 1989, when rising interest rates and relatively high unemployment fueled a housing recession.
Even after last year's sharp drop, 2006 was the third-strongest year for home sales since the NAR began tracking sales in 1968. And prices managed to move slightly higher in 2006; the existing-home median price was up 1.1% to $222,000.

"We have to remember how strong and some might say overheated the housing market was in 2005 in terms of sales and investor demand," said Stuart Hoffman, chief economist of PNC Financial Services Group in Pittsburgh. Last year showed a big drop as a whole "but to a level that frankly is still reasonably active with over six million home sales."

Sales of condominiums and cooperatives led the decline for the year, falling 10.4% to 803,000 units. Sales of single-family homes were off 8.1% to 5.68 million. However, data for the month of December suggested that the condominium market may be starting to recover, and at a faster pace than the market for single-family homes. Condominium sales rose 2.1% in December compared with the previous month as sales of single-family homes declined 1.3%.

Although sales were down across the nation in December, the biggest year-over-year declines occurred in the West, where sales plunged 15.5%. December sales were down 7.1% in the South from a year earlier, 5.5% in the Northeast and 5.8% in the Midwest.

For 2007, many economists predict that sales will continue to fall, but at a more modest pace and with most of the decline occurring in the first half of the year. "The biggest drop is probably behind us," said Fannie Mae's chief economist, David Berson. "But it's still too soon to say this is unambiguously the bottom."

Forecasts for 2007 vary widely. David Lereah, NAR's chief economist, foresees a modest sales decline of 1.2% this year. Mr. Berson expects existing-home sales to drop 7% to 8%.

Source Wall Street Journal