THIRD CONSECUTIVE MONTH OF GAINS

Existing Home Sales Friday January 20, 2012

Record High: 7.25 M (09/05) Percent Change from Record High: -36.4% Existing home sales rose 5.0% in December to an annual rate of 4.61 million. The third consecutive monthly gain was roughly in line with economists estimates. In December, all cash sales accounted for 31% of transactions; distressed sales comprised 32% of the total, first-time buyers accounted for 31% of sales while investors made up 21% of total transactions. Existing home sales are now 3.6% above their year ago level. Contract failures were reported by 33% of NAR members last month indicating sales could have been much higher. Regionally, sales were up in all areas with a 2.6% gain in the West, a 2.9% rise in the South and an 8.3% increase in the Midwest. Sales gained 10.7% in the Northeast. The inventory of homes available for sale fell 9.2% last month to 2.380 million which represents a 6.2 month-supply at the current sales pace. Anecdotal evidence suggests that there is a large shadow inventory of homes available for sale, especially bank owned properties. That will continue to weigh on prices going forward. Indeed, home prices declined again in December with the median price for an existing home down 2.5% over the past year to $164,500 as average prices dropped 2.7% to $212,000. The positives supporting the housing market recovery remain tentative. For now, stronger economic and job growth in the fourth quarter lifted home sales, though pricing remains a weak spot. Contract failures continue to weigh on overall sales. Economists expect home resales to slowly rise from a very deep bottom in coming months with a price and sales recovery beginning possibly later in the year.
MILLIONS OF UNITS Forecast: Consensus*: Actual: 4.50 M 4.60 M 4.61 M Monthly Changes Dec-11 4.61 5.0 3.6 620 10.7 1,040 8.3 1,760 2.9 1,190 2.6 2,380 -9.2 -21.2 6.2 164.5 -2.5 212.0 -2.7 Nov-11 4.39 3.3 11.4 560 9.8 960 4.3 1,710 0.6 1,160 3.6 2,620 -4.4 -16.8 7.2 160.8 -5.5 210.4 -3.5 Oct-11 4.25 1.4 13.6 510 -5.6 920 1.1 1,700 1.8 1,120 4.7 2,740 -5.5 -16.7 7.7 160.8 -5.7 205.9 -5.7 Sep-11 4.19 -3.0 11.1 540 0.0 910 -2.2 1,670 -1.2 1,070 -7.8 2,900 -4.0 -15.0 8.3 165.3 -3.6 212.8 -2.4 Three Month 4.42 Six Month 4.29 Average Changes for Twelve Month 2010 2009 4.29 4.19 -3.4 563 973 1,723 1,157 547 942 1,692 1,113 543 924 1,688 1,138 583 1.6 983 3.1 1,633 2.3 1,138 15.6 3,019 10.1 8.7 172.4 -0.2 219.5 1.2 4.34 5.6 573 -19.7 953 -20.0 1,596 -22.7 984 -8.1 2,741 -12.5 7.6 172.8 -12.4 216.9 -10.1 826 1,242 2,115 1,233 903 1,306 2,128 1,277 Five Year 4.84 Ten Year 5.51

Existing Home Sales (millions) (percent change) (year-on-year percent change) Northeast (thousands) (percent change) Midwest (thousands) (percent change) South (thousands) (percent change) West (thousands) (percent change) Inventory (thousands) (percent change) (year-on-year percent change) Months' Supply Median Sales Price ($000) (year-on-year percent change) Average Sales Price ($000) (year-on-year percent change)

2,580

2,802

2,938

3,172

2,725

7.0 162.0

7.9 165.6

8.2 164.5

8.0 196.2

6.2 188.5

209.4

213.5

212.5

241.3

232.4

Source: Bureau of the Census, Department of Commerce Via Haver Analytics. Data, graph & table courtesy of Insight Economics *Bloomberg 2011 HousingMatrix, Inc. http://www.HousingMatrix.com | All rights reserved. Reproduction and/or redistribution are expressly prohibited. Hot Sheet is a registered trademark of HousingMatrix, Inc. Information contained herein is based on sources we believe to be reliable, but accuracy is not guaranteed.