Existing home sales drop as boost from first-time-buyer credit wans
Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for January showing another significant crack in the epic government sponsored surge in home sales activity with single family home sales declining 6.93% since last month but still remaining 8.58% above the level seen last year.
As for prices, the January release showed a tepid 0.37% decline on a year-over-year basis as well as revisions to prior results erasing last month’s annual gain resulting in 39 consecutive year-over-year declines.
It’s important when reflecting on the sales results to consider that over 69% of all sales were for properties priced below $250,000 while just over 7% were priced at or above $500,000.
Clearly, today’s results unequivocally indicate that the government’s tax gimmick drove a surge in "lemming" demand into the fall of 2009, bringing a renewal of speculative animal spirits, but with an effect that appears to have been largely temporary.
Realtor's are expecting a second great surge of "buying" activity as we near the second tax gimmick expiration this spring but as today's results suggest, these tricks are likely creating very little additional demand and simply shift demand forward as "buyers" jump for the government tax carrot... a carrot likely dangled over an abyss of asset price deflation.
The above chart (click here for full-screen dynamic version) shows national existing single family home sales since 2005.
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