Existing-home sales continue to climb

Sales of previously owned homes across the nation rose in December for the fifth time in the last six months, offering a promise to some in the real estate industry of a long-awaited recovery in 2011.

Sales rose 12.3 percent from November, the National Association of Realtors reported Thursday, but were 2.9 percent below December 2009.

The median price nationally fell 1 percent, to $168,800, reflecting the continued effects of a record volume of distressed homes, which were 36 percent of the U.S. market in December, up from 32 percent a year earlier.

The end of 2009 was the expected expiration date of the federal tax credit for home buyers, which accounted for a large spike in sales. As it turned out, the tax credit was extended and expanded. After its April 30 expiration, sales of previously owned houses nationwide plunged to levels not seen for almost 40 years.

In the eight-county Philadelphia region, December existing-home sales also rose from the previous month - about 9.9 percent - but were 7.7 percent lower than in the final month of 2009, according to Prudential Fox & Roach's HomExpert Market Report. The median price in the region rose 3.2 percent, to $210,000 from $203,500.

The regional market has fewer distressed houses than the United States as a whole or other areas of the country, especially the Southwest, Florida, California, and the Midwest's Rust Belt states.

Realtors association chief economist Lawrence Yun said December "was a good finish to 2010, when sales fluctuate more than normal. The pattern over the last six months is clearly showing a recovery."

Economists outside the housing industry also were upbeat.

"This was a positive report across the board," IHS Global Insight economist Patrick Newport said. "Inventory was down. Finally, first-time home buyers began returning to the market."

Said economist Joel L. Naroff: "The weakest link may be finally eating some spinach." Existing-home sales "soared in December, wiping out the downturn that appeared after the first-time/longtime buyers' incentives disappeared."

Main Line Realtor John Duffy said the local market "seems to be rebounding to a certain extent, and that may have been fueled by a slight rise in mortgage interest rates," which have been increasing since November after falling to a record low of 4.17 percent.

On Thursday, Freddie Mac reported 30-year fixed interest rates of 4.74 percent, up from 4.71 percent a week earlier.

Still, "what will sell a house in a slow market is marketing and price," Duffy said.

"It used to be location, location, location," he said. "But now it is location, condition, and pricing, and pricing should be determined by the location and condition of the property."