Home Sales Pick Up in Fourth Quarter

By:
Peter King | February 12, 2010

Existing home sales rose nearly 14 percent in the final quarter of 2009, spurred by low interest rates and a federal tax credit for homebuyers.

Home sales were up in all but two of the 50 U.S. states and District of Columbia, according to new data released by the National Association of Realtors (NAR), with 32 states seeing double-digit gains in the last three months of the year. Louisiana and Virginia posted the only quarterly declines.
 
For the year, sales were up in the nation’s capital and every state except California, with all but three states seeing double-digit increases. The nation as a whole posted a 27 percent increase in existing home sales compared to 2008, with sales gains relatively balanced among three of the four major U.S. regions, although the Western region trailed the others with only an 18 percent increase.
 
Even as sales rose, however, prices for single family homes declined in the fourth quarter of 2009, to $172,900, down from $178,200 in the third quarter after two consecutive quarterly increases.
 
NAR Chief Economist Lawrence Yun forecast that home prices will begin to increase again by late spring, noting a trend of decreasing housing inventories over the past 18 months, which tends to encourage higher prices.
 
“Because buyers are taking on long-term fixed rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price recovery process appears durable,” Yun said.
 
For the year, prices were down 4 percent compared to the fourth quarter of 2008, when the median national price $180,200. Sixty-seven of the 151 metropolitan areas tracked by the NAR showed annual increases in the fourth quarter of 2009, with 84 posting declines and one remaining unchanged. By comparison, in the third quarter of 2009, only 30 metropolitan areas posted annual increases with 123 showing declines, reflecting an improvement in long-term trends.
 
Foreclosures represented a shrinking share of existing home sales in the fourth quarter of the year, declining to 32 percent of all sales, down from 37 percent in the third quarter.

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