Unfortunately, there was a giant sucking sound after everyone rushed in to October and November... and we now see the largest plunge in monthly sales in 40 years. But no worries - the market sold off for 3 minutes until Goldman Sachs reassured clients that the April 2010 deadline for the extensions of tax credit is just another temporary stop, and there will be more handouts "for the middle class" (wink wink) as we get closer to the spring housing market and cries from Washington (i.e. lobbyists from the home builder sector) about how a new extension is needed to keep the recovery rolling. And thus it will be.
More morphine please!
(keep in mind existing home sales are 90%+ of the market, hence this report is far more important than Wednesday's new home sales)
- Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.
- The National Association of Realtors says sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million in December, from an unchanged pace of 6.54 million in November. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.
- Buyers were no longer scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30, but Congress extended the deadline until April 30. (until the next extension of course)
- The share of homes sold to first-time buyers fell to 43 percent in December from 51 percent the prior month.... indicating the expected end of the tax credit played a role in the drop.
- The median sales price was $178,300, up 1.5 percent from a year earlier
- For the year, existing home sales rose 4.9 percent to 5.16 million, the first gain in four years, from 4.91 million in 2008.