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�� HARD-HIT MARKETS IMPROVING, INVENTORY DOWN IN MOST AREAS After price gains in the first half of the year, the housing market ended 2012 with a national median price matching the year-ago level, according to Realtor.com. A closer look at regional data, however, reveals some markets are continuing to strengthen while others falter. ���National data masks pronounced regional differences in strength of the housing market,��� Realtor.com stated in its report. Consistent with 2012 trends, the group found that Florida, California, and Arizona������markets that were once the epicenter of the housing crisis������are improving, while markets in the Midwest and Northeast continue to struggle. List prices increased in 66 of the 146 markets Realtor.com observes. Prices were unchanged in 31 markets and decreased in 49. One trend that remained relatively consistent across most markets was inventory, which declined in 145 of the 146 markets analyzed. Inventory declined most year-over-year in Sacramento, California (-67.77 percent); Stockton-Lodi, California (-64.99 percent); and Oakland, California (-64.24 percent). Nine of the top 10 markets for declining inventory were located in California. California markets also dominated the list of top 10 markets for list price increases year-overyear in December. Sacramento topped the list with a 43.57 percent increase, followed by Santa Barbara-Santa Maria-Lompoc, with a 35.72 percent increase, and San Francisco, with a 25.04 percent increase. California���s dominance on the list is a new phenomenon this year. A look at the top 10 markets for year-over-year price increases in December 2011 includes not a single California market. Instead, Florida markets took seven of the top 10 spots the year before. The greatest list price declines in December 2012 were recorded in the Northeast and Midwest. Peoria-Pekin, Illinois, topped the charts, with a 14.29 percent decline over the year, followed by Reading, Pennsylvania (-7.84 percent), and Charleston, West Virginia (-7.78 percent). The previous December���s top 10 list included just two Midwestern markets, and four California markets earned rankings. Also notable in Realtor.com���s report is its spotlight on Shreveport, Louisiana. In 2003, after accepting more than 25,000 hurricane evacuees, Shreveport struggled with an unemployment rate that reached its highest point in a decade. However, between June and November of last year, Shreveport���s unemployment rate plummeted from 8.4 percent to 4.6 percent. Amid the economic turnaround, home prices rose 2.91 percent over the year, and Realtor.com expects further improvement this year. VISIT US ONLINE @ DSNEWS.COM MONTHLY DROP IN HOME SALES NO CAUSE FOR ALARM, ANALYSTS SAY The National Association of Realtors (NAR) reported a decline of 1 percent in existing-home sales in December 2012 to a seasonally adjusted annual rate of 4.94 million. The trade group���s report also noted November���s sales were revised downward to below 5 million. Economists had expected the sales pace to improve to 5.1 million from November���s originally reported 5.04 million-pace. However, Capital Economics says the NAR numbers are no cause for alarm. ���[M]onthly changes are volatile,��� the analytics firm stated, adding that three-month averages are often more indicative of market trends than numbers from a single month. Additionally, while cash buyers and investors continue to make up an outsized portion of sales activity���about half of all December���s sales��� Capital Economics suggests rising prices will soon lift many homeowners out of their negative equity position and will lead to increased activity from owner-occupants. ���On this basis, existing-home sales are still rising,��� Capital Economics said, also pointing out that December sales are 12.8 percent above their year-ago level. Patrick Newport of IHS Global Insight said the most compelling data from NAR���s December report are the inventory numbers. At 1.82 million, existing-home inventory reached its lowest level since January 2001. Single-family inventory also slipped to an 11-year low at 1.6 million, which equates to a 4.4-month supply, IHS noted. Capital Economics also noted the low inventory but rationalized, ���it���s normal for supply to fall at this time of year, and after seasonal adjustment, supply was probably above the 2 million mark.��� Regardless, the firm admitted that ���supply is very tight��� and prices are likely to continue to rise. Newport advises taking the 11.5 percent rise in median price with a grain of salt as distressed sales, the mix of types of homes sold, and regional trends ���can distort the headline numbers.��� ���Suffice it to say, all of the well-known home price indicators agree that home prices are rising nationally and in the majority of cities and states,��� Newport said. Distressed homes���pre-foreclosure short sales and REOs���accounted for 24 percent of December���s existing-home sales (12 percent were foreclosures and 12 percent were short sales), up from a distressed share of 22 percent in November but below the 32 percent share reported in December 2011. The median time on market for existing homes sold in December was 73 days, up from 70 days in November but down from 99 days in December 2011. Short sales were on the market for a median of 117 days, while foreclosed REOs typically sold in 45 days. Non-distressed homes took 74 days to move. Thirty-one percent of all homes sold in December were on the market for less than a month. NAR also reported that its Pending Home Sales Index fell 4.3 percent in December, the sharpest month-over-month drop since April of last year and the lowest index reading since September. Pending sales are supposed to be a leading indicator of completed transactions, though it���s not always on point. The index rose in eight months in 2012 (on a two-month lag), but existing-home sales rose in only six. Following the 5.5 percent drop in pending sales in April, existing-home sales in June fell 250,000, the steepest monthly decline in 2012. Nonetheless, NAR expressed optimism, noting the index was above year-ago levels for the 20th straight month in December. 23

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