Existing Home Sales dropped like a stone (NAR report link), because the first time home buyer's tax credit in it's original form expired. What shall May bring when the extended homebuyer's tax credit expires?

^{Src: Reuters}

Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.

Distressed sales were 32% of all sales for December.

Here is the effect of the first time homebuyer's tax credit (of $8 thousand dollars) expiring:

first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. Repeat buyers rose to 42 percent of transactions in December from 37 percent in November; the remaining sales were to investors.

The median home price up slightly from 2008:

first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. Repeat buyers rose to 42 percent of transactions in December from 37 percent in November; the remaining sales were to investors.

Inventory is up for December, a 7.2 month supply.

Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply4 at the current sales pace, up from a 6.5-month supply in November.

Now here is something that makes little sense. The West has the highest unemployment rate, yet look at their existing home statistics:

Existing-home sales in the West declined 4.8 percent to an annual rate of 1.38 million in December but are 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.

Why is the West still so out of line with income, wages and the actual state of the local economies? An exercise for the reader and if one has more insight, please post a comment.

As always, the best blog for home, housing analysis graphs is Calculated Risk.