Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for November showing a significant crack in the epic government sponsored surge in home sales activity with single family home sales declining 16.8% since last month but still remaining 12.7% above the level seen last year.As for prices, December registered the first annual increase for single family home prices in at least 38 months increasing slightly at a rate of .01%.
It’s important when reflecting on the sales results to consider that over 69.2% of all sales were for properties priced below $250,000 while only 7.7% 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 November, 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 foward as "buyers" jump for the government tax carrot... a carrot likely dangled over an abyss of asset price deflation.
The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007, 2008 and 2009 as well as national existing home inventory and month supply.
