Home Sales Hit Record Low

Wednesday, January 26, 2011 - 4:38pm

Economists say it could take years for market to recover.

There was a slight uptick in new home sales at the end of last year, but the numbers were not good enough to help one of the worst housing market years on record.

High unemployment and the ongoing mortgage crisis have home buyers and the overall housing market still in search of solid ground.

Signed contracts for new homes jumped more than 17 percent in December compared to the month before, a move in the right direction.

Still, the total number of new homes sold in December only added up to 22,000 nationwide.

That made for a dismal 2010 where new home sales totaled 321,000, the fewest number of home buyers in 47 years.

"In November, of the 20 cities we tracked, only one, San Diego, saw any increase and that was a scant 1/10th of one percent," says David Blitzer of the S&P 500 Index Committee.

The housing slump sticks out like a sore thumb in what the federal reserve calls an improving economic outlook.

Analysts say unlike other downturns, the damage caused by the mortgage crisis, a flood of foreclosures and falling home values have kept the market from playing a star role in this recovery.

"We've got to work through a large access supply," Blitzer says. "We probably have twice as many homes on the market as we do in normal economic conditions. As that works down prices will first stabilize and then hopefully begin to rise."

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