National home sales down 22%

News item: The National Association of Realtors reports that sales of existing homes in December were 22% below year-ago levels, and 2.2% below November's sluggish sales pace. The AP via CNBC: "Sales of existing homes fell in December, closing out a horrible year for housing in which sales of single-family homes plunged by the largest amount in 25 years. The median home price dropped for the entire year, the first time that has occurred in four decades.

The NAR -- often criticized by readers here for its bullishness -- acknowledged that home sales "remain weak." From the NAR press relase: Lawrence Yun, NAR chief economist, said the market is experiencing uncharacteristic weakness. "Home sales remain weak despite improved affordability conditions in many parts of the country, but we could get a quick boost to the market if loan limits are raised in combination with the bold cut in the Fed funds rate," he said. "Home prices are lower, mortgage interest rates continue to decline and incomes are higher, but many potential buyers are delaying a purchase."

More to come.

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Comments

[zvi plotnik]

the market is reacting to both fear and greed. for 4 years greed was ruling the market, now fear is rulling the market.

[MyLessThanPrimeBeef]

Lawrence of Absurdia forgot to add that many, many potential sellers, in fact googol of them, are delaying selling, though the capitulation is coming soon.

But being absurd, he can't possibly say something like that.

[Rob]

Smart money is out, and spinster Yun will soon be too. I am looking forward to the Senate hearings, and my Tax refund. I think I buy a crash helmet with it.

Heres to the pucker affect...

[caliguy2699]

Yun also evoked a Great Depression reference in the NY Times article:

“It’s the first price decline in many, many years and possibly going back to the Great Depression,” said the group’s chief economist, Lawrence Yun."

[mike]

Does anyone know the likelihood of what Gaylord's talking about actually happening?

IMO: This is exactly what we don't need more of--risky lending. There is a reason why we have limits on loan sizes for these federal backed entities--there is much more risk involved. American taxpayers will be the ones to foot the bill if those co's get in trouble.

Also, love how he thinks that its "grossly unfair" that some Americans in "high cost areas" don't have access to low interest loans. Living in a high cost area is a a luxury; not a right, Gaylord. You should have to pay for that luxury.

"NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that raising the loan limit on conventional financing is urgently needed. “The most effective way to stimulate housing and minimize the potential for a recession is for lawmakers to raise the limit on conforming mortgages to $625,000, which would open safe and affordable financing to buyers in high-cost areas,” he said. “It is grossly unfair that some Americans do not have access to low-interest rate loans. This would help people as they move away from risky subprime mortgages and high-interest rate jumbo loans.”

[tealeaf]

Choice #1: Correction, put housing in line with everything else (such that the median can afford the median house, blah blah blah.

Choice #2: Find a way to make the $1M condo "seem" affordable. If it ain't exotic mortages, it'll be taxpayer-funded mortgages via a flattened interest rate and GSE limits.

Question: What good is a $1M condo when it costs $1000 for a trip to the grocery store?

I'll take door #1, thank you very much.

[MyLessThanPrimeBeef]

The Senate hearings - that'd be the circuses.

The tax refund, well, that's for your bread, not a crash helmet.

Nero, when faced with a similar problem, resorted to clipping coins.

Today, we are smarter. We just run a bigger budget deficit and lower our rates and dollar.

Speaking of Romans, this just in: The Italian government just fell. Prodi lost confidence vote.

[mbob]

Add a few exclamation points to Yun's forecast!

And you've got Lefty!

Coincidence?!

I think not!

Wake up, people!

[ray]

Bring back "stated income" loans and option arms, but wait....100% guaranteed by the full faith and credit of the U.S. Government (ultimately us the taxpayer).

"Privatize the profits and socialize the losses."

Angelo Mozilo I know you're laughing.

[Big E]

I have no problem with them raising the conforming limits to $625k as long as they don't budge on the existing DTI and LTV limits, which would prevent all the LIARS from getting FHA/GSE mortgages.

Sadly however, I think eventually they will modify the DTI and LTV limits, and we'll end up with a backdoor government bailout of these toxic mortgages, and it will be sold as "benefiting the poor homeowners" out there.. (puke)

[lefty]

ok people, if you've got the money now is the time to buy in fantastic metro L.A.!! make your move now while some poor people can't the good loans. this will not last for long, believe it!!

[MyLessThanPrimeBeef]

When you post here, there is a test to make sure you are not an automatic robot.

My question is: How did Lefty get past that?

[Rob]

Danger, Lefty Robinson, Danger !!!

[jdj]

Finally, the Realtorz can no longer say "House prices have never gone down since the Great Depression"!

[ProblemWithCaring]

its so weird... lefty doesn't appear until someone says his name...its like when the bullish housing noise grows too loud on this blog, we collectively conjure him ...he comes and puts the final ridiculous exclamation point on the absurd cheerleading...then all is righted in the world...

that or he waits 'til the rss feed says 'letfy" and then he cuts and paste from his pre-existing template of trollisms... either way...simply magical...