Energy costs, interest rates hurt December home sales

The California Association of Realtors (whose 2006 president is Vince Malta from San Francisco) released a report today on December home sales.

“Sales fell last month compared with December 2004’s record-setting pace, prompted by consumers’ concerns about rising interest rates,” said C.A.R. President Vince Malta. “The last few months of 2005 marked the first time since mid-2004 that the fixed-rate mortgage was above 6 percent on a sustained basis and the adjustable-rate mortgage was above 5 percent for three months in a row."

The positive news was that the median price of an existing home in California in December still increased 15.6 percent over a year ago.

"C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in December 2005 was 3.6 months, compared with 2 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate."

“We are experiencing a return to a more balanced market, in line with our expectations, although unsold inventory is still near historical lows, with a 3.6 month supply of homes for sale,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Time on the market also is nearly unchanged at 44 days in December compared with 40 days for the same period last year."

The San Francisco Business Times also has an article covering this report (Thanks, Brett!)

Note to doomsday prophets: No bitching until appreciation drops out of the double-digits. Your stock market still can't touch a 15% average return.