December home sales in my area
* Home sales dropped 36.7% year-over-year to 511 from 807.
* For-sale inventory rose 12.6% to 24,433 last month from 21,699 in December 2006. Inventory did show a seasonal dip from last month's cycle high. But using the "months supply at current sales pace metric," inventory is running at 48 months -- yes, that means we have four years of home supply on the market.
* The median price of an existing home fell 10.7% to $250,000 (a fresh cycle low) from $280,000. Average days on market rose to a new high of 154 days from 120 in December 2006.
Clearly, the housing market in this area continues to struggle. The real question is, "What will happen as the spring selling season ramps up?" Mortgage rates are falling for good-credit, conventional borrowers, with 30-year fixed rates now below 6%. But tighter mortgage standards for non-plain-vanilla borrowers, rising unemployment, and deflationary psychology among buyers ("Why buy now when I can get a house for less in six months?") are so far offsetting the positive impact of lower financing rates. We'll just have to see how this all plays out.