Existing-home sales had a rough 2006 fourth quarter according to figures released
Thursday by the National Association of Realtors.
Total existing-home sales including single-family houses,
condos, townhouses, and coops were at a seasonally adjusted annual rate of 6.24
million units during the quarter. This is 10.1 percent off the pace of sales
in the fourth quarter of 2005.
The downturn was wide-spread, affecting 40 states. Six states showed an increase
of sales year-over-year, one state was unchanged, and sufficient data was not
lacking from three other states.
Indiana had the biggest sales increase; existing homes sold
at a pace 13.7 percent above the last quarter of 2005. Second was Arkansas which
showed an 11.1 percent improvement and Texas, with sales running 6.22 percent
ahead of one year ago was third.
Prices nationwide were also down. The median existing home price nationwide
was $219,300, 2.7 percent lower than the median in the fourth quarter of 2005.
The largest price increase for single family houses was the
Atlantic City, NJ areas where the median price of $339,800 represented an increase
of 25.9 percent over the fourth quarter of 2005. Salt Lake City was second with
a gain of 22.7 percent to $223,600.
Condo prices now are at a median of $220,900, 2.1 percent lower than in the
fourth quarter of 2005. Prices increased in 31 metro areas and seven of those
had double digit increases but in 27 metro areas prices declined.
Strong condo prices were evident in Wichita, Kansas, San Francisco/Oakland/Fremont
and in much of Southern California.
On a more local level overall existing home sales and median prices were down
in every region:
| Region |
Northeast |
South |
Midwest |
West |
| Sales |
10.4 million |
2.49 million |
1.43 million |
1.23 million |
| % Sales Change |
-6.6% |
-8.5% |
-8.6% |
-17.8% |
| Median Price |
$274,600 |
$181,700 |
$161,800 |
$355,100 |
| % Price Change |
-2.5 |
-3.7 |
-4.2 |
0.4 |
The best performing metro areas price-wise were (after national leaders listed
above), Pittsfield, MA in the Northeast, Beaumont-Port Arthur, Texas in the
South; Davenport-Moline-Rock Island, Iowa in the Midwest; and Salem, Oregon
in the West.
David Lereah, NAR's chief economist stated that the fourth quarter would be
the bottom for the current housing cycle. "This information confirms 2006 was
the year of contraction, and hopefully the fourth quarter was
the bottom of this current business cycle. Home sales are leveling at historically
high levels, and examination of data within the quarter shows home prices stabilizing
toward the end. When we get the figures for the spring I expect to see a discernable
improvement in both sales and prices."
But did you notice a trend in the figures reported above? Not only is Lehreah's
forecast typically optimistic, but while the report did say
that sales were down or prices fell in this region or that, the only specific
areas which were mentioned (Salt Lake, Pittsfield, Port Arthur) were where sales
improved or prices were up. The report went so far as to fall back on reporting
that typical sellers in metropolitan areas "experienced healthy gains on the
value of their homes over the last five years in almost all 131 available areas,
even in areas with recent price declines." Yeah, we know. It was called "the
bubble."
If the market appears to be bad in your state, we are sorry we cannot tell
you where you are vis-'-vis the overall statistics. If the situation
in your area improved in terms of sales or price appreciation, NAR trumpeted
that information but if your metro area or state is in trouble you will have
to learn about it elsewhere. Perhaps we can tell you when the quarterly same
house report from the Office of Federal Housing Enterprise Oversight is issued
later this month.
NAR stands to lose credibility unless it also loses its Pollyanna
approach to reporting the data for which it pretty much holds a monopoly. Realtors
and by extension their customers and clients, rely on this information to price
homes and set business strategy. It is time that NAR bites the bullet and get
real about the full measure of statistics it collects. It is a public service
to do so and even the most transparent of cover-ups eventually has drastic consequences.