Home Sales Jump in December, Precipitated By House Price Drops in November

Home sales jumped 6.5% in December, the biggest monthly increase in nearly seven years, as falling prices drew out more buyers according to information released by the National Association of Realtors on Monday. The NAR report for December showed that sales are strongest where home prices have been pummeled in markets such as California, Florida, Nevada and Arizona. In these areas and other parts of the western US sales increased 13.6% and prices tumbled 31.5% according to NAR’s statistics. Seasonally, inventories showed a decrease in line with prior year’s due to seller’s removing listing during the month of December.

This data correlates to the information released today in the the S&P/Case-Shiller home-price indexes for November. All major US metropolitan areas in the index showed decreases with Phoenix showing the sharpest market declined at a month to month change 3.4% and Denver showing the smallest decline at 1.1% month to month. On an annualized basis, Phoenix showed the largest annualized decline of 32.9%. Cities in the northern portions of the US are showing smaller home price declines than those who have already moved to warmer climates for retirement.