Home Sales Set Records in 2001
Despite the recession and the devastating effects of Sept. 11, sales and prices of existing homes in the U.S. rose to record levels last year, an industry group said Friday.
The report by the National Assn. of Realtors attested to the amazing resilience of U.S. consumers, who have kept snapping up homes in the face of rising unemployment and weakening business conditions.
Although home sales dipped in December, buyers purchased 5.25 million homes last year, 2.7% more than the previous year. Median prices of previously owned homes rose an impressive 6.1% to $147,500.
This year, however, sales are expected to decline slightly because mortgage rates are edging higher and consumers will be unable to sustain the current buying pace, said David Lereah, the association’s chief economist.
The housing market should remain strong in 2002, “though it will not be a driving force behind the recovery,” said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.
In California, sales of existing homes fell for the second year in a row as interest in high-end properties waned in many areas and home building trailed demand, the California Assn. of Realtors said. A total of 504,429 homes were sold last year, down 5.7% from 2000, the L.A.-based trade group said.
Still, prices are expected to hit a record when final figures are tallied, said Leslie Appleton-Young, the group’s chief economist. In December, the median resale price of a single-family home in California was $276,940, up 11.5% from the same month a year earlier.
A chronic shortage of new housing has boosted overall home prices throughout the state, she said.
In December, for instance, housing inventory stood at 2.9 months, about the same as a year ago but less than half the average over the last decade, Appleton-Young said.
“That housing shortage creates a sense of urgency in the marketplace,” she said.
New-home permits, an indicator of future building, remained flat statewide last year, with 147,752 permits pulled for single-family and attached homes, according to the Construction Industry Research Board, a Burbank firm that tracks real estate trends. The Bay Area, staggered by the slumping high-technology sector, recorded a 17.9% decline in permits.
In Southern California, new-home permits rose 2.8% for the year, with the Inland Empire accounting for a large chunk of the gain because of cheaper housing. The number of housing permits in Orange County slumped 30%, a reflection of robust building the previous year.
