Existing home sales surge in December
* Sales surged 12.3% to a seasonally adjusted annual rate of 5.28 million from 4.7 million units in November. That was far better than the 4.87 million SAAR economists were expecting, and it leaves home sales at the highest rate since May.
* By property type, sales jumped 11.8% in the single-family market and 16.4% in the condo and coop arena. By region, sales gained at a double digit rate across the board. They gained 10.1% in the South, 11% in the Midwest and 13% in the Northeast, and 16.7% in the West.
* The number of homes for sale fell 4.2% to 3.56 million from 3.72 million in November. That was up from 3.283 million a year ago, however. But the strength in sales helped pushed the months supply at current sales pace indicator of inventory down to 8.1 from 9.5, the lowest since March. Median home prices dipped 0.8% to $168,800 from $170,200 a month earlier. That was a 1% change from year-ago levels.
The housing market continues to show signs of life, with building permits, confidence, and now sales perking up. Indeed, single-family sales activity shot up at the fastest pace in any month going all the way back to January 1983. The gains were widespread regionally as well, and that helped reduce the backlog of unsold homes somewhat. I credit the improved tone of the labor market, a pick up in buyer confidence, and a budding sense the worst might be over for home pricing.
At the same time, we're still talking about a market with more than three and a half million homes officially for sale. You have quite a bit of "shadow inventory" behind that, and foreclosures continuing to be parcelled out into the market over time. So I don't anticipate we're going to see consistent, large gains like we did last month. It will be more of a gradual improvement in the tenor of the data over the course of 2011.