Home sales plummet in December

The numbers “clearly indicate that the rebound in housing demand observed so far has been largely supported by government programs,” Anna Piretti, senior economist at BNP Paribas, wrote in a research note Monday.

The federal tax credit for up to $8,000 for first-time homebuyers was set to end in December, but instead was extended to April 30 and expanded to include a $6,500 tax credit for repeat buyers.

Locally, sales in everyWashington suburb dropped last month, save Loudoun County. December house sales in the District dropped 16.5 percent to 518, and combined sales in Prince William County, Manassas and Manassas Park dropped 11.2 percent to 578. In Maryland, Montgomery County’s sales dropped 18.1 percent, from 923 to 756.

In Virginia, Loudoun County’s home sales increased marginally, from 391 in November to 413 in December.

Still, home sales picked up in 2009. Year-over-year sales increased 15 percent nationwide from December 2008, when 4.74 million houses were sold. For all of 2009, the 5.1 million home sales were 4.9 percent higher than the 4.9 million in 2008.

“It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,” said Lawrence Yun, NAR’s chief economist.

And tony Montgomery County is facing a problem that would have been nearly unthinkable several years ago: Foreclosures.

In 2009, more than 6,600 properties received a foreclosure filing in the county — a 42 percent jump from 2008 — according to the foreclosure-tracking Web site RealtyTrac. Further, home prices in Montgomery ticked down in December from December 2008.

Foreclosed houses have helped drive prices down in some sections of the county. The low prices, in turn, prompted more sales in November, said John McClain, deputy director for George Mason University’s Center for Regional Analysis.

“November was a huge jump in sales,” he said.

Still, the number of home sales last month palesin comparison with sales during the mid-2000s housing boom. Nearly 1,400 homes were sold in Prince George’s County and nearly 1,500 in Montgomery in December 2004. More than 2,100 houses were sold in Fairfax County that month, with the median sales price $410,000.

Real estate agents remain hopeful. The number of “for sale” signs is dropping, said Amy Ritsko-Warren, vice president and chief operating officer for the Greater Capital Area Association of Realtors. As unemployment creeps up across the region, though, the question is demand, she said.

“We don’t know what the demand is going to be,” she said. “Nobody has a guess on that.”

Yun predicted a spring sales surge spurred by the extended and expanded federal tax credit, but also pointed to the bleak job market.

“By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010,” he said. “However, the job market remains a concern and could dampen the housing recovery — job creation is key to a continued recovery in the second half of the year.”

The Associated Press contributed to this report.

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