Economy Watch: Existing Homes Sales See Best Year Since ’06

By Dees Stribling, Contributing Editor

The National Association of Realtors reported on Thursday that total U.S. existing home sales increased in December by 1 percent to an annualized rate of 4.87 million units – that includes single family, townhouses, condos, and co-ops — from 4.82 million units in November. That’s 0.6 percent below the 4.9 million-unit level in December 2012.

For all of 2013, there were 5.09 million sales, which is 9.1 percent higher than for all of 2012. It was the strongest annual performance for the housing market since 2006, when sales reached an unsustainably high level of 6.48 million units, just before everything went pop.

Inventories were down for the month, but up for year, according to the Realtors. Total housing inventory at the end of December fell by 9.3 percent to 1.86 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace, down from 5.1 months in November. Unsold inventory is 1.6 percent above a year ago, when there was a 4.5-month supply.

Mayors More Optimistic

The U.S. Conference of Mayors released a report this week at its semiannual meeting in Washington, D.C., that says that nearly all of the nation’s 363 metropolitan areas are expected to see real economic growth this year – that is, 1 percent or more. Only seven areas won’t grow at least that much this year, which is a lot better than last year, when more than 100 metros were still suffering from economic contraction.

Some places will do quite well. Sixty-nine U.S. metros are predicted to experience real economic growth of 3 percent or higher in 2014, while more than 220 metros are expected to see real growth of 2 percent or higher this year. Even places like Buffalo and Youngstown, Ohio, which have been on the short end of the stick for years, will grow this year by 1.5 percent and 1.6 percent, respectively.

Naples, Fla., will experience the nation’s fastest growth among metros, seeing its economy expand by 6.3 percent, the report predicts. Among the larger metro markets, the best performers will include Raleigh (up 4.2 percent), Atlanta (up 3.7 percent), and Austin, (up 3.6 percent). IHS Global Insight compiled the report on behalf of the mayors.

Wall Street took a dive on Thursday, with the Dow Jones Industrial Average losing 175.99 points, or 1.07 percent. The S&P 500 was off 0.89 percent and the Nasdaq advanced 0.57 percent.