Existing Home Sales Plunge

From Bloomberg - "U.S. Existing Home Sales Fall 8.6% in November to 4.49 Mln Rate":

Sales of previously owned homes in the U.S. fell more than forecast in November and prices dropped by the most on record, indicating the real estate slump will extend into a fourth year and worsen the recession.

Purchases declined 8.6 percent to an annual rate of 4.49 million, from a 4.91 million rate in October that was less than previously estimated, the National Association of Realtors said today in Washington. The median price dropped 13.2 percent from a year earlier, the biggest decline since records started in 1968. Separately, the Commerce Department reported today that new-home sales fell 2.9 percent last month.

Making more of the wrong kind of history:

The median price of an existing home fell to $181,300, and the percentage drop from a year ago was “probably the largest price decline since the Great Depression,” although records don’t go back that far, said NAR Chief Economist Lawrence Yun.

Foreclosures and short sales accounted for 45 percent of last month’s home purchases, Yun said.

Resales of single-family homes fell 8 percent to an annual rate of 4.02 million. Sales of condos and co-ops declined 13 percent to a 470,000 rate.

What happened in your neck of the woods?

Purchases declined in all regions of the country, led by drops of 12 percent in the Northeast and 10.9 percent in the South. Sales fell 7.4 percent in the Midwest and 4.3 percent in the West. Prices also fell throughout the country, led by a decline of 25.5 percent in the West.

The Western region continues to fare better in recent existing home sales reports. It looks like the dramatic drop in prices in many of the Western markets (CA, AZ, NV) are pulling in a respectable number of buyers looking for and finding deals. During the earlier stages of the housing decline, the Southern region had been holding strong, now, they're feeling the strongest pain in reduced sales.

Do we really need to restate that Real Estate is local, Real Estate cycles, and money flows in and out of markets. If you can't sell your home in CA, how can you afford to move to North Carolina? Simply one basic example of cause and effect. One less home on the market in CA, one more home still on the market in North Carolina. Inventory, inventory, inventory.