There are some days I feel sorry for Lawrence Yun.
After all, being the chief economist for the National Association of Realtors (NAR) isn’t quite what it used to be. Heck, even his predecessor David Lereah now admits the bubble was a something of a mirage.
That has left Lawrence with the tough task of putting a happy face on industry that continues to free fall.
That’s true even though yesterday’s data on existing home sales surprised to the upside. According the NAR existing-home sales climbed 6.5 percent to a seasonally adjusted annual rate of 4.74 million in December.
But beneath those cheery figures was another truth altogether-one that must have Yun staring at the ceiling all night.
It was that nationally, a stunning 45 percent of December sales were properties that had been through foreclosure.
As a result, the areas of country that enjoyed yearly price double-digit increases during the housing bubble— like California, Arizona, Nevada and southern Florida—ended up boosting the sales data that Yun and others were cheering about.
Moreover, the national median home price plunged by 15.3% falling to $175,400 from a year earlier when it stood at $207,000. That’s down from $219,000 in 2007-an over all drop of 19.91% in two years.
So while Lawrence tried to his best to spin a positive out of the data, the truth is that the “big” uptick in sales was driven primarily by the biggest slump in prices since the Great Depression.
Needless to say, that’s a tough one to put a happy face on-even for Lawrence Yun.
By the way, here’s the latest read on prices from the Case-Shiller Home Price Index.
From CNNMoney by Les Christie entitled: Home prices fall at record pace
“An index of home prices in 20 major metropolitan areas fell at a record annual pace in November, to levels not seen since 2004, according to a report released Tuesday.
The S&P Case-Shiller Home Price Index, a sampling of 20 cities from across the nation, fell a record 18.2% over the 12 months ended Nov. 30. That brought the index to its lowest point since February 2004. From its peak in mid-2006, the index has plunged a whopping 25.1%.
Eleven of the 20 cities showed record declines, and the 12-month price drop for 14 of the cities was a double-digit percentage.
“The freefall in residential real estate continued through November 2008,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, in a prepared statement. He said the 20-city index has fallen for every month since August 2006, a total of 28 consecutive months.
The decline was very broad, with prices down at least 1% in every region of the nation during the October-November period. Eight regions recorded record monthly declines, according to Blitzer.
The Case-Shiller numbers just underscore how tough the market is for home sellers, according to Mike Larson, a real estate analyst with Weiss Research.
“We’re clearly seeing some of the impact of falling prices,” said Larson. “But the problem is that many of those sales are made at the cheapest prices [often of bank repossessed properties], making it hard for normal homeowners to sell.”
He does not foresee any swift improvement in housing markets – not as long as industries of all kinds keep announcing new layoffs, as several companies did Monday when more than 70,000 Americans learned they would lose their jobs.
“Home prices will likely decline, albeit at a slower pace, for the rest of 2009,” said Larson”
Here is a breakdown of the 20-city declines…..
Poor Lawrence Yun.
It would be easier to put Humpty Dumpty back together.