Existing home sales jumped 12.3 percent last month to a seasonally adjusted annual pace of 5.28 million units, the National Association of Realtors reported today.
However, sales were still off 2.9 percent compared to one year earlier.
NAR chief economist Lawrence Yun noted that home sales were on the “uptrend,” and said the pattern over the past six months clearly points to a housing recovery.
It may appear that way, but the national median existing-home price of $168,800 was actually down from $170,600 in November and one percent lower than a year ago.
Yun attributed that to a rise in distressed sales, which include foreclosures and short sales.
Total housing inventory fell 4.2 percent to 3.56 million existing homes for sale at the end of December, which represents an 8.1-month supply at the current sales pace.
That’s down from the 9.5-month supply in November, but there’s one major problem.
The shadow inventory – another 6,870,000 properties are either 30 or more days delinquent or in foreclosure, according to the December 2010 “First Look” Mortgage Report released yesterday by Lending Processing Services.
So despite traditional housing inventory being down month-to-month, home prices will probably be forced down for a quite a while thanks to all that excess foreclosure inventory.
This could lead to even more foreclosures as underwater borrowers jump ship, greatly diminishing any semblance of a housing recovery in 2011.
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