by Calculated Risk on 1/25/2007 10:13:00 AM

The National Association of Realtors (NAR) reports: Existing-Home Sales Ease

Click on graph for larger image.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – eased 0.8 percent to a seasonally adjusted annual rate1 of 6.22 million units in December from a level of 6.27 million in November. Sales were 7.9 percent lower than a 6.75 million-unit pace in December 2005.

The above graph shows NSA monthly sales for 2005 and 2006. On an NSA basis, sales were 11% below December 2005.

Total housing inventory levels fell 7.9 percent at the end of December to 3.51 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace – down from a 7.3-month supply in November.

Inventory is not seasonally adjusted, and it is normal to see a decline in inventory in December during the holidays. Usually 6 to 8 months of inventory starts causing pricing problems, and over 8 months a significant problem. With current inventory levels at 6.8 months of supply, inventories are now well into the danger zone.

There were 6,480,000 existing-home sales in all of 2006, down 8.4 percent from a record 7,075,000 in 2005. The second highest total was 6,779,000 in 2004; NAR began tracking home sales in 1968.

2006 was the third highest sales year ever, and 2006 also had record year end inventories, both in actual numbers and as a percent of owner occupied units.

This graph shows the annual sales, since 1969, and year end inventory numbers since 1982.