Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses existing home sales.

• The only economic data out today is NAR’s existing home sales.  The total annual sales in 2011 were 4.26 million, which is a 1.7 percent increase from 2010.  The total annual sales have been essentially stuck at a very low level:  4.1, 4.3, 4.2, and 4.3 million in each of the past four respective years.
• A 5 percent increase to the 4.61 million unit annualized pace in December (seasonally adjusted) is a good finish to a tough year.  If this level of activity can be sustained, we could see 4.6 million sales in 2012, which would represent a decent 7 percent gain.
• The median home price of all homes sold in 2011 was $166,100, which was a decline of 3.9 percent from one year ago.
• In December, there were 2.4 million homes available for sale, which is the lowest count since March 2005.  At the current sales pace, it would take 6.2 months to exhaust the inventory.  About 5 to 6 months at the national level would correspond to sustained moderate increases in home prices.  Price stabilization or a small price increase is likely to occur from this year onward.  Be mindful that in the winter months, inventory is always lower compared to spring and summer months.
• Graphs speak louder than words and here are few graphs to peruse.  The home buyer tax credit occurred in 2009 and the first half of 2010.

Lawrence Yun, Chief Economist

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.