Sussex County, Delaware Home Sales - as of July 24, 2009

THe National Association of Realtors reports that existing home sales is up for the third month in a row. So, for our local market, things are looking up! The real estate market, albeit sluggish, is still continuing to surprise us with sales! Below is a breakdown of what has sold this year.

Single Family - 763
Condos / Town Homes - 267
Mobile - 115
Multi Family - 3
Lots / Land - 162
Farms - 6
Commercial - 22

The total closed real estate transactions for this year thus far is 1,338. The average list price, as of June 30, 2009, was $321,130, and the average sales price was $298,522. Homes are selling at 93% of list price, and averaging 201 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County, Delaware Home Sales - as of July 15, 2009

Times are changing, and with that brings a busy real estate market. Summer has been good for the county so far, and we hope it will continue. Our website, www.beachtobayrec.com, is the only one in the county to offer an exclusive FORECLOSURE/BANK OWNED page, and in the past 2 weeks, I have noticed very few new ones come on the market, and quite a few that have sold or under contract. This is encouraging news when you look at the big picture. This is an indication that the economy is turning slightly. Let's jsut keep our fingers crossed!

Here is a breakdown of what has sold this year thus far.

Single Family - 708
Condo / Town Home - 238
Mobile - 107
Multi Family - 3
Lots / Land - 156
Commercial - 22
Farms - 6

The total closed real estate transactions for 2009 is 1,240. The average list price as of June 30, 2009, was $321,130, with an average sales price of $298,522. Listings sold at 93% of list price and average 201 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of June 23, 2009

Despite all the rain we have had, buyers are out in full force, looking for deals and new homes! It has been a busy Spring/Summer so far ... at least in our office. Below is a breakdown of what has sold this year thus far.

Single Family - 585
Condo / Town Home - 192
Mobile - 93
Multi Family - 3
Lots / Land - 136
Farms - 4
Commercial - 19

The total closed real estate transactions for the year thus far is 1,032. Seventy-one homes sold since my last update, which was June 15, so that is a great indication that things are really moving. The average list price, as of May 31, was $316,358, with an average sales price of $294,883. Homes sold at 93.2% of list price and averaged 199 days on market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Steady home sales could be positive signal

April sales are a sign to some economists that the worst of the housing downturn may be over.

NEW YORK (CNNMoney.com) -- Sales of newly constructed homes were almost flat in April -- but in a sickly housing market, economists saw a few reasons for hope.

The Commerce Department said new home sales ticked up 0.3% last month to a seasonally adjusted annual rate of 352,000. That was from a downwardly revised reading of 351,000 in March.

Analysts were looking for the rate of new home sales to rise to 360,000, according to a consensus estimate of economists compiled by Briefing.com.

"We aren't seeing a huge upswing in market conditions. But we aren't seeing things fall apart again, either," said Mike Larson, real estate and interest rate analyst at Weiss Research, in a research note.
New home sales -- which have plunged as builders struggle to construct homes to compete with drastically cheapened foreclosure properties -- were 34% below the same month a year ago, when they estimate stood at a 533,000 annual rate.

The median sales price of new homes rose to $209,700 in April, up nearly 4% from a revised median home price of $202,200. That was still 14.9% behind the median price of $246,400 the same month a year ago. The average sales price was $254,000, down 1% from a revised $257,100 in March.

Inventory reduced: Drastically reduced prices have lured in enough buyers to start chipping away at the glut of inventory that has been weighing down the market. At the end of April, the seasonally adjusted estimate of new homes for sale was 297,000, or a 10.1 month supply at the current sales rate. In January, there was a revised 12.4 months of supply on the market.

"Inventory levels continued to improve and broke through 300,000 for the first time since 2001," said Adam York, economist at Wachovia, in a research note. "We are encouraged by the relative stability in sales and the continued improvement in inventory levels."

Plunging mortgage rates also served to attract buyers into the market. But as Treasury yields have risen recently, so have mortgage rates. According to a weekly survey from Bankrate.com, the 30-year fixed mortgage rates rose to 5.45% in the week ended Wednesday, up from 5.24% in the prior week.

However, last week's rate was still significantly below the 6.20% of a year ago, and the historically low rates could continue to bring buyers, according to one economist.

"We still think the combination of very low mortgage rates and falling inventory will entice people back into the market in greater numbers over the next few months," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a research note.

But he called the April sales rate "a bit disappointing, given the hefty increase in homebuilder sentiment in the past couple of months."

Slow and steady: Going forward, if indeed the worst is over, economists say improvement will be slow and steady.

"Looking back, January may turn out to have been the bottom in new home sales," said Wachovia's York. "We do not expect a major pick-up in the near term, but stability over the summer would not be a surprise."

Even with home inventory levels shrinking and home prices attracting new buyers, "there is no evidence whatsoever of a renewed housing boom -- just a gradual increase in activity in some markets, brought about by lower prices, lower mortgage rates, and tax and builder incentives," said Weiss' Larson.

By Catherine Clifford, CNNMoney.com staff writer, last updated: May 28, 2009: 12:07 PM ET
http://money.cnn.com/2009/05/28/real_estate/new_home_sales/index.htm?postversion=2009052812

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of June 14, 2009

There has been a flutter of activity in the locate real estate market, and it is showing in the statistics. The season is beginning for the summer guests, the interest rates, although slowly climbing, are still enticing people to purchase homes, and we are seeing more homes close successfully. Below is a breakdown of what has sold this year thus far.

Single Family - 547
Condo / Town Home - 182
Mobile - 84
Multi Family - 3
Lots / Land - 124
Farms - 3
Commercial - 18

The total closed real estate transactions for 2009 thus far is 961. The average list price as of May 31, 2009 was $316,358, and an average sales price of $294,883. Homes are selling at 93.2% of list price, and averaging 199 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of May 18, 2009

Whew! What a wet month it has been. It is nice to see the sun out and the temps in the 70's. I'm ready for Spring! The real estate market is in full swing. Homes are selling, buyers are buying and home prices are remaining fairly stable. Below is a breakdown of what has sold for the year thus far.

Single Family - 414
Condo / Town Home - 143
Mobile - 57
Multi-Family - 3
Lots / Land - 102
Farms - 2
Commercial - 15

The total closed real estate transactions for 2009 thus far is 736. The average list price as of April 30, 2009 was $314,740, and the average sales price was $293,773. Homes are selling at 93.3% of list price and are averaging 196 days on the market. We anticipate sales to remain strong and prices steady. There is light at the end of the tunnel, and we can see it!

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Housing Numbers: Green Shoots or Red Flags?

Two new pieces of data out today suggest, at face value at least, an improvement in the housing market.

First, construction spending rose 0.3 percent in March. Now granted, that's not an awful lot, but it's the first time that number has been positive in six months. The trouble is, single family construction dropped 8.6 percent after falling a record 11 percent in February. Nonresidential construction, however, came in strong and actually unexpectedly strong.

Okay, great then about nonresidential, except that the gains came in commercial buildings, educational buildings and manufacturing, which are all overbuilt already for today's real estate climate. "March's gains were likely from ongoing projects that were started when the outlook was brighter than it is today," writes economist Patrick Newport of IHS Global Insight.

Of course on the bright side, you could argue that continued drops in residential construction spending is a good thing for the market, given how high new home inventories are right now. The less we build, the faster we get back to normal levels of supply and demand. That's the bright side, if you are not actually a home builder.

The second piece of data, Pending Home Sales from the National Association of Realtors, also came in higher than expected. An increase of 3.2 percent month to month in contracts signed for existing homes could signal a coming boost in existing home sales. Of course, "while pending home sales have historically been a one-month leading indicator to existing home sales, with a 71% correlation using a one-month lag," writes JP Morgan analyst Michael Rehaut, "we note that since October, the relationship has been more volatile. Specifically, Feb.’s Pending Home Sales rose 2.0%, but March Existing Home Sales fell 3.0%." Rehaut adds that rising unemployment and weak consumer confidence will keep these levels depressed through the year.

Most agree that the increase in demand is driven by continued demand for foreclosures, a huge increase in affordability, low mortgage rates and the $8000 first time home buyer tax credit. Credit-Suisse analyst Dan Oppenheim in looking for a correlating rise in existing home sales in April, based on these pending numbers, a 3.9 percent increase to be precise. Since the largest gains appear to be in the South and West (homes to your biggest boom and bust states), we can probably expect to see even a bigger percentage of sales coming from foreclosures or short sales. And that's not bad.
The faster we get rid of the distressed inventory, the faster we can get regular, higher-priced homes some action.

Posted By:Diana Olick, http://www.cnbc.com/id/30563800

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Is Now the Time for Some Home Buyers to Make a Deal?

While housing prices are continuing to fall, prospective home buyers may not want to wait much longer for the market to hit bottom, experts say.

"Most of the big declines in home prices have occurred," says Lawrence Yun, the chief economist at the National Association of Realtors. "Any more will probably be minimal."

Part of the reason is that homeowners are becoming more realistic in listing their asking price.

"Home prices are where they should be," says Robert Abbott, co-owner and VP of Abbott & Caserta Realtors in northern New Jersey. "Sellers are accepting the current reality and are pricing more realistically."

The latest Case-Shiller report shows that home prices in 20 cities dropped 18.6 percent in February from a year earlier. But for the first time in 16 months, that rate of decline eased from the prior month.

A look at the median home prices across the U.S. shows that some prices have actually risen in recent weeks, according to the National Association of Realtors.

Region January '09 February '09
Northeast $227,000 $251,000 (up)
South $143,300 $146,700 (up)
Midwest $131,000 $131,000 (same)
West $215,000 $204,600 (down)

The median prices are still down from the same time in 2008, but that's more a reflection of what were over inflated prices, says Abbott.
"We're experiencing an adjustment in prices," Abbott says. "From my area, we've been in a down market since 2005 and I think we are now at a stabilized place."

The current price level of homes seems to be drawing more buyers into the market, says Jim Gillespie, CEO of Coldwell Banker.

"We are seeing a lot of activity across the nation," says Gillespie. "Of course we're in the Spring market, but we've seen more buyers in the market now than at this same time last year."

More people are not only 'kicking the tires' but actually buying right now, says Abbott.

"We are showing significant activity when it comes to sales," Abbott says. "The number of days for a house on the market are going down."

But not all levels of housing are seeing the benefit, according to Cindy McLellan, a real estate broker in Denver, Colorado.

"Lower levels of home prices are seeing more of the activity," says McLellan. "Higher priced homes, those in the $1 million range and above, are still taking some time to sell. High enders still have trouble getting jumbo loans and sellers are till trying to make a profit."

McLellan says it's the first time home buyers that are driving the market. "With the $8,000 tax break from the Obama Administration and lower interest rates, first time buyers really have an incentive to buy and they are."

Not everyone thinks housing prices have bottomed or might not even go lower. Fred Skolich, president of Skolich Real Estate in New Jersey says prices remain in flux.

"I think they are still going to come down," says Skolich. "We're in the middle of the Spring market. After we get away from that, I think you’ll see some further adjustments in price."

"There's no need to rush," says J. Andrew Hansz, an associate professor with the department of finance and real estate at the University of Texas at Arlington. "It's a buyer's market right now. If you need a place, it's a good time, but buyers are in control."

But home buyers waiting on the sidelines to time the market could be making a mistake, says Skolich. "You might wait for a lower price, but then interest rates could go up," Skolich says. "It's like a stock, you don't know if you're really buying at the bottom or not."

And those prospective buyers making low offers, might find themselves in a bidding war, says NAR's Yun.
"I think some buyers are trying to steal property by offering low prices," says Yun. "But even in those markets that plunge, buyers are coming back and making bids."

"We've seen some bidding wars" says Robert Abbott. "It's very competitive especially when the home is priced right."

Whether someone is in the market to buy, just looking or waiting for prices to drop even more, analysts say the current state of housing is the best it's been for some time.

"I'm not just saying this because I'm in real estate, but I think it’s as great a time to buy as I have seen in my 34 years in the business," says Coldwell Banker's Gillespie. "Houses are affordable, there are plenty of homes to choose from and you have record low interest rates on 30 year mortgages."

© 2009 CNBC.com, http://www.cnbc.com/id/30455148/

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County, Delaware Home Sales - as of May 1, 2009

The local market is picking up. We are seeing an increase in showings, and even writing competitive contracts (i.e. multiple contracts). This is great news and a good sign the market, at least locally, is beginning to turn around. Below is a breakdown of what sold last week.

Single Family - 350
Condo / Town home - 117
Mobile - 48
Multi Family - 3
Lots / Land - 86
Farms - 2
Commercial - 12

There were an additional 55 homes sold in the past week, bringing the total for the year to 618 thus far. I do not have the statistics for April yet, so will post them as soon as they become available. I must say tho that is encouraging news indeed.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Real Estate Outlook: Indicators of Recovery

You may not be quite ready to accept the idea that housing on a national basis has moved beyond bottoming out and is now in slow recovery mode.

But think about this: Even if you're bearish on the market, you've got to notice that some extraordinarily positive signs are popping up that point to recovery.

New mortgage applications last week for home purchases and refinancings were up 77 percent from the same week in April 2008, according to the Mortgage Bankers Association. That's a statistic that's hard to ignore!

Mortgage rates continue to average well below 5 percent -- 4.7 percent last week on average for 30-year fixed-rate loans and 4.5 percent for 15 year loans. Rates like these are a major factor pushing applications way up, no question, but sharply lower housing prices in many markets are an important part of the equation as well.

Nearly 600,000 homebuyers have already claimed either the $7,500 tax credit from last year, or the $8,000 credit for this year, according to IRS data cited by the National Association of Home Builders.
Many of these buyers are true first timers, but plenty of others are people who are now jumping back into real estate after not owning for a few years, drawn in by today's much more affordable prices and financing.

The rebound underway in mortgages is even creating a mini hiring boom! The Bank of America has just announced that it will be adding 5,000 new positions around the country -- just to deal with its red hot mortgage business, which closed nearly 400,000 new loans during the first quarter. Other big lenders are hiring loan officers and processors again too.

Hard-hit local housing markets continue to roar back with sales gains. On Florida's west coast, in the Sarasota and Bradenton areas, sales were up 28 percent in March over last year, and pending sales -- pointing to more purchases in the pipeline but not yet closed -- were up 27 percent.

Inventories of unsold houses in the Sarasota-Bradenton area are down 31 percent, to the lowest level since December 2005, according to a report from Trendgrafix.

Nationally, house prices have begun moving up again after many months of declines. According to the Federal Housing Finance Agency, prices rose by seven tenths of a percent on average last month - after falling by six and a half percent during the previous 12 months.

By Kenneth Harney, Published: April 28, 2009, http://realtytimes.com/rtpages/20090428_realestateoutlook.htm

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

NAR President speaks about existing home sales

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of April 27, 2009

The season has begun! We were able to get out and enjoy the beach this weekend, and even strolled the new boardwalk in Rehoboth. It was nice to get out and soak up the sun!
The real estate market continues to move -- slowly, but continously. In the past two weeks, there have been 74 new closed real estate transactions. Below is a break down of what has sold this year.

Single Family - 323
Condo / Town Home - 106
Mobile Home - 41
Multi- Family - 2
Lots / Land - 79
Farms - 2
Commerical - 10

The total closed real estate transactions for the yaer thus far is 563. The average list price as of March 31 was $313,762, and the average sales price was $294,587. Homes are selling at 93.9% of list price and are averaging 198 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Signs of life in the housing sector

Sales are picking up in some of the nation’s hardest-hit regions

Last year the Cape Coral area of Florida had the highest foreclosure rate in the country. Banks moved to seize more than 1 in 10 residential properties in the Gulf Coast community of 165,000. The reverberations are still being felt. Newly built McMansions sit vacant, dusty monuments to the great real estate boom. Smaller homes have been ransacked. Apartment buildings have been boarded up. Former owners are stripping whatever items they can from their homes before the locks get changed, says Kirsten Prizzi, a local real estate agent at AC Global Realty. "Knobs, appliances. Someone was selling windows."

But a curious thing is happening in this blighted former boomtown: Buyers are swooping in. First-time home-owners are suddenly entering bidding wars with real estate speculators from as far away as Spain and Germany. Sales in February outpaced those at the peak of the boom, with some houses getting more than 50 offers and selling above their asking price. "I look for markets that are downtrodden," says Rich Lehrer, a retiree and self-proclaimed "emerging-market investor" from Wilmington, N.C., who wants to buy several properties in the area. "I'm expecting to get better yields than I would get on my cash."

Cape Coral isn't the only bright spot in housing land. Some of the very regions that led the U.S. housing market into the abyss are beginning to show signs of life. Sales on the Gulf Coast of Florida, California's Inland Empire near Los Angeles, and the Las Vegas metropolitan area surged by more than 80 percent in February vs. the same month last year.

So what's going on? In all of these markets, banks are dumping foreclosed properties, attracting cash-rich speculators looking for cut-rate bargains. "Why wait [for a bottom] if it's the right deal?" says Brent McAlee, a 31-year-old Las Vegas resident who recently paid $140,000 for a three-bedroom home that fetched around $350,000 a few years ago. He hopes to rent it out for $1,300 a month.

What's more, first-time buyers are finally rushing in, lured not only by plunging prices but also government incentives like ultralow interest rates and hefty tax breaks. Such sweeteners are just too tasty for some to pass up, at least in markets that have already plunged by 50 percent or more.

Frenetic buying in a few depressed areas doesn't mean the national bust is over — far from it. But it does herald the start of a new phase in the boom-and-bust recovery cycle. Economists might call it equilibrium:

Prices have fallen so much in some areas that shoppers are getting interested again, improving the balance between buyers and sellers. That doesn't mean prices will surge anytime soon. But heavy buying should at least begin to put a floor under prices. "Are we at the bottom?" asks Christopher Thornberg, an economist with Beacon Economics. "We are getting close."

If Thornberg is right, one might expect other markets to begin the bottoming out process in the coming months. Just as California, Florida, and Las Vegas led the nation into the housing bust, those areas could provide the template for a national recovery. "One of the big problems we have across the nation is a lack of confidence," says Adam York, an economist with Wachovia (WFC) in Charlotte, N.C. "As these former bubble markets bounce off the bottom in terms of sales, it could give some hope to [other markets] that the declines are going to end."

Plenty of caveats are in order, because there are peculiar bear-market factors at work. The fact that inventories are falling precipitously in California — to just 6.5 months' supply from 15.3 months a year earlier — would seem to augur well. Historically, "prices respond very dramatically to inventory," says William C. Wheaton, director of research at the Massachusetts Institute of Technology's Center for Real Estate.

But inventories are falling fastest in markets where speculators and first-time buyers are driving the action. Those parties don't have to put their own homes on the market to make a deal. It remains vexingly difficult for home-owners who have bought in the past five or so years to sell one property and buy another.

On top of that, government incentives of up to $8,000 in tax credits for first-time buyers and low mortgage rates engineered by the Federal Reserve are luring shoppers who otherwise would be sitting out. If the government were to take away the punch bowl, markets that seem to be bottoming could well turn down again.

Hard-hit markets
What's more, banks have tightened their lending standards so much that only the most qualified buyers are finding it easy to get loans. Until financing loosens up, the housing market can't possibly take off.

It's best to view the brisk sales in some markets as glimmers of hope in a national market that seems likely to remain weak for a while. Sales continue to fall in many areas, especially those that didn't get hit until recently. In Charlotte, where home prices were rising until a few months ago, sales dropped 38 percent in February over the previous year. Nationally, the S&P/Case-Shiller index that tracks home prices in the top 20 metro areas was down 19 percent in January from a year earlier and 29 percent from its 2006 peak. "The market is still doing badly," cautions Robert J. Shiller, a professor of economics at Yale University and a creator of the index. But, he adds, "there's always light at the end of the tunnel."

That light could be growing brighter in Las Vegas. Home sales began to drop in Sin City before they fell in most other parts of the country. Now Vegas is deeply mired in recession. Unemployment has risen to 10.1 percent, far above the national average. More than 80 percent of the homes for sale are distressed properties, either those where the owner faces foreclosure or those already owned by a bank. Median prices have fallen from $315,000 in June 2006 to $155,603 today, roughly the same level as in 2002.

The lure: low interest rates
Those dizzying price drops are attracting the likes of Mark and Claudia McLaughlin. The couple, who work for the New York State Corrections Dept. and live in Westernville, N.Y., plan to retire in Las Vegas in six years or so. They're eager to find a place while prices are still low. In late March they went house hunting with an agent, checking out 18 homes between $75,000 and $100,000. "We figure we'll buy something now and get a good price on it," says 55-year-old Mark McLaughlin. "We'll rent it out, and it'll pay for itself." They won't need to sell their upstate New York home for years, by which time that local market might have improved.

The Garvins, too, are doubling down while keeping their current home. In 2004, hotel finance manager J.D. Garvin and his wife, Nona, a nurse, paid $202,000 for a 1,200-square-foot townhouse in Las Vegas, which would probably sell for half that today. After the birth of their first child last year, they decided they needed more space. So in late January they bought a 3,800-square-foot home for $300,000 in the suburb of Henderson, Nev.

With prices still low, the Garvins decided to find a tenant for their first home rather than sell it. The rent almost covers the monthly mortgage on their first property. Says 30-year-old J.D. Garvin: "We feel good about the fact that we're paying a little bit more than the other mortgage — and the house is three times as big."

For the Garvins, who weren't eligible for the government tax credit, record-low interest rates were a big enticement. With the rate on their 30-year fixed-rate mortgage at 4.75 percent, the payment on their $292,000 loan is around $1,600 a month. Nationally, the rate on a 30-year fixed-rate loan averages around 4.85 percent, the lowest on record.

In California, politicians are adding to the federal inducements. The legislature has passed a $10,000 tax credit available to anyone who buys a newly built home. (Existing homes don't qualify.)

The tax break lured Marisol Monroy to make the switch from renter to owner. Monroy had been sitting nervously on the fence for more than a year as friend after friend faced foreclosure in Southern California. In March the married mother of three bought a four-bedroom home in a new development in Fontana, part of the once-bustling Inland Empire. Her monthly payment, including taxes and insurance: $2,100, only $600 more than the rent on her three-bedroom apartment in Placentia. Monroy figured her kids would hate moving but says they're excited to get into their new home: "They're counting down the days on the calendar."

Real estate investors are sensing their moment, too. Speculators get a bad name during boom times for driving prices into the stratosphere. But in the depths of a bust, they're needed to help clear out inventory and stabilize prices. John Hoehl has trekked down from Vermont to scope out investment properties in Cape Coral — where some foreclosure properties are selling for just $30,000. So far, he's bid on three properties, scooping up a three-bedroom house on the water for $150,000. "At this rate we're going to see a big shortage of inventory by summer, and that will trigger prices to rise," says Paula Hellenbrand, president of the Cape Coral Association of Realtors. Local agent Marc Joseph of Foreclosure-ToursRUs.com has bought two boats to take prospects in search of waterfront properties on "foreclosure cruises."

The buying would be brisker still were it not for the banks. Financing remains a wet blanket both for first-timers and speculators. With banks toughening their lending standards, it helps for first-time buyers to come with as much cash as possible. Dean Brittingham and her partner, Nancy Rocks, put a solid 20 percent down on a $350,000, Mediterranean-style home in Santa Rosa, Calif.—and they still had problems. An investor had bought the three-bedroom house just a few months before for $187,000. The quick flip on the distressed property raised red flags for their mortgage lender, which insisted on a second appraisal. As the couple jumped through that hoop, they missed a deadline and decided to start the process all over at a different bank. The two finally closed on the property in March. "Our agent said it's a brand-new time," says Brittingham. "Everything's different."

Speculators, too, are dealing with tight financing — sometimes by looking beyond banks. During the boom, Robert Close made a tidy profit building homes that cost as much as $640,000 in the Inland Empire. Now he's focused on working with a small group of investors to buy and fix up foreclosed properties. Because many banks won't lend money for homes that need major repairs, Close pays cash — or turns to what's known as "hard money," independent financiers who charge interest rates as high as 12 percent.

But Close says he can make money even with such high interest rates — a sign that prices may be too low. He typically shells out $75,000 for each house, plus $20,000 for repairs. He then rents it out for up to $1,500 a month, producing double-digit returns on his investment. In the past seven months Close has picked up 34 properties, taking care to avoid the homes he built. "I guess I'm superstitious," he says. "I don't want to press my luck." That kind of cautious speculation is a far cry from the go-go days. But after a three-year bust, it's a sign that some markets might be moving in the right direction.

By Christopher Palmeri, Mara Der Hovanesian and Prashant Gopal

updated 7:43 a.m. ET, Tues., April 7, 2009

http://www.msnbc.msn.com/id/30032506//

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County Home Sales - as of April 15, 2009

April Showers bring May flowers, right? I should hope so with the day we are having outside! Well, I would say February's gloomy stats brought new hope for March's records. It was quite an impressive change, and one that I am rather excited to report. Here is a breakdown of what sold over the past week.

Single Family - 489
Condo / Town Home - 93
Mobile - 37
Multi-Family - 2
Lots / Land - 73
Farms - 2
Commercial - 10

There were 40 additional closed real estate transactions in the past week, bringing the total to 489 for the year thus far. The average list price as of March 31 was $313,762, compared to $296,924 for the end of February, and the average sales price was $294,587, compared to $278,270 for the end of February. To me, that says the market is slowly turning around. Throughout 2008, we had seen a monthly decline between average list and sales prices of about 9.5%. This jump in the March statistics is about a 10.5% increase. This is good news indeed! Let's see how long and well it lasts.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County, Delaware Home Sales - as of April 7, 2009

The sun is shining, the daffodils and tulips are blooming and Spring is in the air! As with nature bursting with new life, so is the real estate market, although at a much slower pace. However, we are seeing home sales staying rather consistent and somewhat stable. Below is a breakdown of what has sold in 2009 thus far.

Single Family - 253
Condo/Townhome - 84
Multi Family - 2
Mobile - 31
Lots/Land - 69
Commercial - 10

The total closed real estate transactions for 2009 thus far is 449, with an average list price, as of February, of $296,924, and an average sales price of $278,270. Homes are selling at 93.7% of list price and averaging 206 days on the market.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Home Starts Regain Some Ground in February

U.S. housing starts in February turned upward for the first time in eight months, posting a 22.2% gain that was primarily due to a big jump in often-volatile multifamily construction, according to numbers released by the U.S. Commerce Department on March 17.

"While welcome news, this gain only reflects a modest rebound from January, which was the worst month in history for new-home production," said NAHB Chief Economist David Crowe. "The majority of the gain was due to characteristic volatility on the multifamily side, while single-family housing starts were up just over 1% for the month."

"Builders did pull a larger volume of single-family permits in February, suggesting a glimmer of hope for the prime home buying season, which is near at hand," said NAHB Chairman Joe Robson. "That said, we realize there's a need to be extremely cautious in terms of new building activity going forward, because there's still quite a lot of inventory out there that needs to be absorbed as foreclosures continue to flood the market in many areas."

Total U.S. housing starts rose to a seasonally adjusted annual rate of 583,000 units in February — reflecting an 82.3% surge in new multifamily production to a yearly pace of 226,000 units and a 1.1% rise to an annual rate of 357,000 single-family starts.

Regionally, the only area of the country losing ground in February was the West, whose total housing starts skidded 24.6%.

The Northeast was up 88.6%, the largest regional gain, with a rebound that was just about equal to its decline the previous month. The Midwest posted a 58.5% gain following a deep plunge in January, and the South climbed 30.2%. January-February averages were well below the monthly averages for the final quarter of 2008 in all regions of the country.

Building permits, which can be an indicator of future building activity, rose 3% overall to a seasonally adjusted annual rate of 547,000 units in February. Single-family permits rose 11% to 373,000 units, while multifamily declined 10.8% to 174,000 units.

By region, building permits registered a 27.6% gain in the Northeast, no change in the Midwest, a nearly 6% hike in the South and a 13.6% slump in the West in February.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Eye on the Economy: Home Sales Should Stabilize Soon

As we expected, growth of real gross domestic product (GDP) for the final quarter of 2008 has been revised down substantially by the Commerce Department — from an annual rate of -3.8% in the “advance” report to -6.2% in the “preliminary” report. The revised number is the sharpest quarterly contraction since the depths of the 1982 recession.

The downward revision for the fourth quarter reflected weaker numbers for many components of GDP, including consumer spending, business inventory investment, net exports and nonresidential fixed investment — including production of nonresidential structures.

The housing production component of GDP (residential fixed investment) was revised only slightly, showing a 22.2% rate of contraction that knocked 0.78 of a percentage point off the overall GDP growth rate for the fourth quarter.
That’s quite a large drag from a relatively small component of the economy (about 3%) that’s been falling for three full years.

Another Stock Market Debacle Deepens Economic Problems Early This Year
The stock market apparently had hit bottom early last November, and the market managed to stage a modest recovery over the balance of 2008.

But then the equity market took another major leg downward, carving another $2 trillion from household net worth and decimating the attitudes of consumers, businesses and financial market participants alike.

The market has rallied in recent days, on the backs of financial companies of all things, but the market remains deeply in bear territory and the durability of the recent rally is highly in doubt.

Available evidence on economic activity for the early part of 2009 points toward contraction of all major components of real final sales (inflation adjusted) other than spending by the federal government on national defense.

Another major decline in GDP definitely is in the cards for the first quarter — we’re currently estimating -5.5% — even if the stock market continues to improve over the balance of this month.

With respect to housing production, we’re expecting residential fixed investment to contract at an annual rate of about 40% in the first quarter, the largest quarterly contraction of the entire downswing. This is virtually inevitable in the wake of a massive downshift in housing starts late last year and early 2009 that’s taking residential construction put-in-place down sharply at this time.

Labor Market Deterioration Has Picked Up Steam
The current recession began at the end of 2007 when the job market started to lose ground, and the labor market has been deteriorating rapidly through February. According to the latest figures, nonfarm payroll employment has declined by 4.4 million since the recession began, and more than half of that decline, 2.6 million, has occurred during the last four months.

Residential construction (builders and specialty trade contractors) continues to be an important part of the deteriorating employment story, shedding 911,000 jobs since its peak in February 2006 and losing 226,000 during the last four months alone.

The unemployment rate has been moving up substantially from the cyclical low of 4.4% in 2007 and major increases have been recorded in recent months.

Indeed, the civilian unemployment rate jumped from 7.6% in January to 8.1% in February, the highest reading since 1983. The Labor Department’s broadest measure of labor “underutilization,” including discouraged workers and those working only part time for economic reasons, soared to a lofty 14.8% in February — up by more than five percentage points over the past year.

Further deterioration of the labor market is inevitable, for both the housing sector and the overall economy. We expect large payroll job losses to persist through the second quarter and we expect the unemployment rate to peak out above 9% around the end of the year.

Home Sales Should Be Stabilizing Soon
Large cumulative declines in home prices in many areas, combined with attractive interest rates on prime conventional conforming fixed-rate mortgages (salable to Fannie Mae or Freddie Mac) and an FHA/VA loans, have generated substantial improvements in housing affordability measures even as the deepening recession has taken a toll on median household income.

Surveys of consumer sentiment (University of Michigan) showed relatively large proportions of households saying in both January and February that it was a “good time” to buy a house, primarily because of low prices and low interest rates.

Improving sentiment has not yet shown through in official home sales data. Sales of new homes, as reported by the Commerce Department, and “pending” sales of existing homes reported by the National Association of Realtors® (both based on contract signings) declined substantially in January, reaching new cyclical lows.
NAHB’s proprietary survey of large single-family builders, available through February, is providing some tentative encouraging signs.

Seasonally adjusted gross sales (new orders) have been essentially flat since last November, and seasonally adjusted net sales showed a modest recovery over that period as sales cancellations continued to move downward in absolute terms.

NAHB’s broad-based single-family Housing Market Index also was essentially flat during the November-February period, albeit at or near the record low for the series, and preliminary tabulations point toward more of the same in March.

NAHB’s baseline forecast shows a bottoming-out of sales of both new and existing homes in the first quarter of this year, aided and abetted by key provisions of the economic stimulus bill that was signed into law on Feb. 17 — the $8,000 refundable, but not repayable, tax credit for first-time buyers and the boosting of loan limits for both the government-sponsored enterprises (GSEs) and FHA back to 2008 levels.

Everything Now Depends on the Strength of Economic Policy
The economy recently has gone from bad to worse, despite a variety of economic policy supports put in place late last year.

The fate of the economy and the housing sector now depend very heavily on the strength of President Obama’s three-legged policy stool, along with complementary monetary policy support from the Federal Reserve. Policy actions by foreign governments also will be part of the policy puzzle.

There are major question marks about all of this:

• Will the recently enacted fiscal stimulus bill be large enough, with enough short-term stimulus, to fill widening holes in key components of private spending?
• Will Treasury Secretary Tim Geithner’s Financial Stability Plan really stabilize financial markets via recapitalization of the banking system and removal of “toxic” assets from bank balance sheets?
• Will President Obama’s plan to stem mortgage foreclosures be strong enough to make a real difference?
• Finally, will the Federal Reserve be able to revive moribund credit markets via various “balance sheet” policies when the federal funds rate already is at its effective floor?

Regarding the credit markets, the recently launched Term Asset-Backed Securities Loan Facility (TALF), a cooperative venture involving the Fed and Treasury, holds out promise for selected consumer and small-business asset-backed security (ABS) markets — and possibly for commercial as well as private-label mortgage-backed securities markets.

But it’s too early to tell how much difference the much-heralded TALF will make.

The resolve and skill of economic policymakers will determine the length and depth of the current recession and the dimensions of the ensuing recovery and expansion.

It does appear that policymakers have agreed, explicitly and implicitly, to prevent more “systemically important” major financial institutions from going belly-up. (Lehman Brothers was an unmitigated disaster for the markets.)
If that’s the case, and if a decent measure of financial stability is restored in reasonably short order, then the recent judgment by Fed Chairman Ben Bernanke that, “…there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” looks like a good bet.

That’s the guts of NAHB’s current baseline forecast, although the range of risk remains unusually wide.

Sussex County, Delaware Home Sales - as of February 10, 2009

Spring is in the air! The snow is melted, the windows are opened, and the jackets are left at home. At least for a couple more days until we get the threat of "the white stuff" again...

But, with warmer weather comes more real estate activity. Historically, Spring has always been the busiest time of year for real estate, and that usually starts at the very end of February. We have had a respectful amount of homes sell in the past 41 days, and I have a good feeling we will only see these numbers rise. Below is a break down of all the closed real estate transactions in 2009 thus far.

Single Family - 73

Condo / Town Home - 22

Mobile - 8

Multi-Family - 1

Lots / Land - 27

Commercial - 4

For a total of 135 closed real estate transactions. I do not have the averages for January yet, but will post those as soon as they become available.

Beach to Bay Real Estate Center is a full service real estate brokerage servicing buyers, sellers and renters at the Delaware beach areas. We handle all forms of real estate, including residential, commercial, and lots and land, in addition to bank owned, short sales and auctioned properties and representation; mortgage needs including refinances, new home purchases, second homes, first time homebuyer programs and reverse mortgages; maintain professional relationships with local settlement attorneys, insurance companies, contractors, and inspection companies; and are affiliated with a preservation and restoration company. Beach to Bay services all of Sussex County, and southern Kent County, with a strong focus on the beach resort areas of Rehoboth Beach (19971), Lewes (19958), Bethany Beach (19930), Dewey Beach (19971), Milton (19968), Millsboro (19966) and more.

Sussex County, Delaware Home Sales - as of Jan 26, 2009

It is snowing outside! This confirms that it is indeed winter -- I was beginning to wonder with the weather lately, and the lack of white stuff falling from the sky! With the cold months of winter comes a slow time of year for real estate. The Delaware beach areas are managing to hang on and chug along smoothly. We aren't seeing the numbers we have seen in years past, but homes are selling. I have a feeling once we thaw out and colors start appearing in yards, we will see a change in the market, but not as quick a comeback we experienced in 2003 through 2005. Below is a breakdown of what has closed for 2009 thus far.

Single Family - 41

Condo / Town Home - 13

Mobile - 6

Multi-Family - 0

Lots / Land - 8

Farms - 0

Commercial - 3

The total closed real estate transactions for the year is 71. That is a difference of 21 from this time last week. I should have averages and statistics for January by mid-next week, so I will post those at that time.

Existing Home Sales in Surprise Jump

Sales of existing homes in December rose 6.5% from November. But prices continued to fall, down over 15% from last year.

NEW YORK (CNNMoney.com) -- The number of existing homes sold in December rose 6.5% from the previous month, according to a report released Monday, as bargain hunters took advantage of plummeting prices.

The National Association of Realtors said that home sales increased to a seasonally-adjusted, annualized rate of 4.74 million units. That's up from a revised pace of 4.45 million units sold in November and more than the rate of 4.4 million units projected by a consensus of industry analysts as reported by Briefing.com.

"We have some months to go before we are out of the woods on the housing front," said Robert Dye, senior economist at PNC financial services group. Especially considering "weak consumer confidence and ongoing rapid deterioration in labor markets."

Still, December's existing home sales are down 3.5% compared with December of 2007, when the seasonally-adjusted, annual sales rate was 4.91 million. Existing homes include single family homes, townhomes, condominiums and co-ops.

For all of 2008, there were 4,912,000 homes sold, which was the lowest volume since 1997, when there were 4,371,000 homes sold. Sales volume in 2008 was down 13.1% from the 5,652,000 existing homes sold in 2007.

Bargain hunters: Bargain prices are bringing buyers back into the market. The median existing home price was down 15.3% to $175,400 from December 2007, when the median price was $207,000. The median price measures where half of the homes sold for more and half sold for less.

"Americans love a bargain, and the housing market is no exception," said Mike Larson, real estate and interest rate analyst for Weiss Research in a written statement.

Thanks to the sales increase, the number of homes available on the market decreased 11.7% in December from the previous month, to 3.68 million. That represents a 9.3-month inventory supply at the current pace of sales, down from a 11.2-month supply in November.

"That's exactly what we need to see if the housing market is ever going to get back to a state of equilibrium," said Larson.

Home prices were pushed lower by the high volume of distressed sales, which accounted for 45% of December transactions according to the report.

"The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal, balanced conditions," said NAR chief economist Lawrence Yun in a written statement. He warned that the housing market is far from healthy. "Buyers will continue to have an edge over sellers for the foreseeable future."

Surge in the West: The number of homes sold nationwide was buoyed by a surge in the West, where the housing market has been hardest hit by a record number of foreclosures.

Existing home sales in the West surged 13.6% to an annual rate of 1.25 million in December, up 31.6% from a year ago. But the median price in the West was $213,100, down 31.5% from December 2007.

In the South, existing home sales increased 7.4% to an annual pace of 1.74 million in December, but that was still 11.2% lower than December a year ago. And sales in the Midwest increased 4% in December to an annual rate of 1.04 million, but were down 10.3% from the same period last year.

The Northeast saw sales edge 1.4% lower, to an annual pace of 720,000 in December, down 14.3% from December 2007.

In the months to come: Analysts said that the weakening job market would slow any recovery in housing.

On Monday morning, a slew of companies announced a massive wave of job cuts. Home Depot (HD, Fortune 500), the No. 1 home improvement retailer, announced it would eliminate 7,000 jobs, or 2% of its total workforce, while Caterpillar (CAT, Fortune 500) said it will cut 20,000 jobs.

"Unfortunately, we are seeing fast and furious [layoffs] now," said PNC's Robert Dye. "And that does add to the level of uncertainty and it does put workers and consumers on edge."

Mike Larson from Weiss Research echoed that sentiment. "It's hard to imagine a lasting turn in the housing market with thousands of layoffs being announced every few days," he said.

The Obama administration is now at work on an economic recovery plan, and Yun said that this will be critical to the revitalization of the housing industry.

"The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery," Yun said in a statement.

By Catherine Clifford, CNNMoney.com staff writer

Last Updated: January 26, 2009: 12:30 PM ET