WASHINGTON — Sales of existing homes posted an unexpected increase last month, as consumers snapped up bargain-basement foreclosures in Nevada, California and Florida, closing out the worst year for the U.S. real estate market in more than a decade.
Analysts, however, cautioned that prices are likely to keep falling through 2009, and they said the outlook for home sales is highly uncertain, despite a boost from low mortgage rates.
“I don’t think we’re close to a bottom yet,” said Michelle Meyer, a Barclays Capital economist who sees nationwide prices falling another 15 percent this year. “We’re still very far away from a normal housing market.”
If President Barack Obama’s administration enacts a plan to keep borrowers in their homes, analysts said, the number of foreclosures on the market might decline, but it’s still unclear how successful any government efforts will be.
Sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November, the National Association of Realtors said Monday. Without adjusting for seasonal factors, sales nationwide were up 1.1 percent from a year earlier, reflecting a surge of more than 36 percent in the Western states.
Some in the real estate industry were encouraged by the surprising jump in sales and a big decrease in the number of homes for sale. “It looks like we are hitting bottom (in sales),” said Ronald Peltier, chief executive of HomeServices of America Inc., which owns real estate agencies in 19 states.
Interest these days is coming from prospective buyers such as Todd Kuhn of Richmond, Va., who waited until prices dropped to a more affordable level before starting to look in earnest. He and his wife, parents of a 14-month-old daughter, have visited about 20 homes this month.
“I see this as the first real opportunity that we’ve had … at, hopefully, the bottom of the market,” said Kuhn, a 34-year-old dentist. “I know that the economy is going to turn around someday. Hopefully we’ll be well positioned for that.”
While sales boomed last month in Los Angeles, San Diego and Las Vegas, they sunk in cities with formerly healthy markets like Atlanta; Charlotte, N.C.; Raleigh, N.C.; Seattle; and Portland, Ore., according to the Associated Press/Re-Max Monthly Housing Report, also released Monday.
Home prices in Seattle are falling and foreclosures have picked up, but sales are still sluggish and listings are languishing on the market for six months or more, said Gary DeRosa, a Seattle-based real estate agent with ZipRealty Inc.