January 25, 2010

Yikes! Sales of U.S. existing homes plunged 16.7% in December to a seasonally adjusted annual rate of 5.45 million from 6.54 million in November, according to the National Association of Realtors.

Was this the result of the fact that the popular tax credit was set to expire?

“The market is going through a period of swings driven by the tax credit,” said Lawrence Yun, NAR chief economist. “We’re likely to have another surge in the spring.”

As it happened, the tax credit was extended until June 2010 and expanded to cover repeat buyers. However, buyers didn’t know the credit would be extended when they were shopping for homes in October. In order to close in December, they would have had to sign a sales contract by early November at the latest.

The median existing-home price rose to $178,300 in December, which is up 1.5 percent than a year earlier. It’s the first year-over-year gain in median price since August 2007.

“…job creation is key to a continued recovery in the second half of the year,” Yun said.

For all of 2009, sales were up 4.9 per cent to 5.156 million as compared to 2008.

Looking for more information on this? Check out the real-estate lobby groups full release, here.

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