“We’re very pleased that home sales are starting to pick up in some areas,” said Margaret Kelly, Chief Executive Officer of RE/MAX International, Inc.. “Lower home prices are certainly motivating buyers and this is exactly what the market needs right now.”
The trend of increased sales was seen in several metro areas that have experienced high numbers of foreclosures. Orlando saw an annual increase in sales of 30.19%, Detroit had an increase of 22.4%.
However, with foreclosures still on the rise, home prices continue to fall. The 56 metro area average showed a 4.87% drop in December prices from November and a 20.19% drop from December 2007.
“Unfortunately, the housing industry has been at the center of our current economic problems and the marketplace probably won’t stabilize quickly without government assistance,” says Kelly. “While we support lender-incentives to reduce foreclosures, it may also be necessary for the government to stimulate the market with lower interest rates and tax credits to encourage homebuyers and a return to more normal conditions.”
The report had some other good news… Inventories are beginning to recede. The average number of homes for sale on the market was down 7.69% from November and down 3.93% from a year ago. Many analysts believe than reduced inventories may signal the beginning of the end for the current down cycle in housing. 41 metro areas among the 56 contained in the report, reported a drop in inventory. Inventories are falling in many metro areas where sales are the highest. The December inventory in Los Angeles was down 28.52% from a year ago and down 23.38% in San Diego.
The December 2008 Associated Press-RE/MAX Monthly Housing Report is the fifth report completed by RE/MAX and Associated Press. The report is distributed near the end of each month for the previous month’s market data.
