Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 28, 1992 TAG: 9201280090
SECTION: BUSINESS PAGE: A3 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
HOME SALES BOOST HOPE SLIGHT DECEMBER GAIN IS 3RD IN A ROW; OUTLOOK GOOD
The pace of existing-home sales rose 0.9 percent in December, a real estate trade group said Monday. It was the third monthly gain in a row and, analysts said, further confirmation of a modest housing revival.Still, sales of previously owned homes fell to a six-year low in 1991, prompting the economists to suggest that any rebound this year will be moderate.
"There's certainly no expectation that there is going to be a real surge," said Daryl Delano of Cahners Economics in Newton, Mass. "It's probably going to be midyear before things are really well established. So, for the year as a whole, we're not going to see a big boom."
But any increase in existing-home sales would be an improvement over the 0.3 percent decline last year, when sales dropped to 3.287 million units, according to figures compiled by the National Association of Realtors. That was the smallest sales total since 3.214 million units were sold in 1985.
Regionally, sales were mixed in December and for the year. They were up in the Northeast and the West at year's end, but down in the South and the Midwest. The Northeast and the Midwest posted annual gains; the South and the West recorded losses.
Stephen Hoover, president of the Virginia Association of Realtors, said the real estate industry has been affected by consumers' confidence. He said more people are afraid of losing their jobs and not investing in housing for that reason.
Hoover, a partner with Mastin Kirkland Bolling Inc. of Roanoke, said home sales in Virginia varied by region, but he expects the market to increase this year.
The state Realtors' association released statistics Monday showing its members wrote contracts to sell 57,739 new and existing houses through November 1991, down 5.6 percent from 61,173 in the first 11 months of 1990.
In the Roanoke Valley, the association said its members sold 2,527 houses last year, down 24.5 percent from 3,349 in 1990. In December, 123 houses were sold, down 6.8 percent from 132 in December 1990.
Although numbers for sales in January won't be released until next week, Laura Benjamin, executive vice president of the Roanoke Valley Association of Realtors, said sales have increased significantly.
Existing-home sales, which Delano described as "the first link" in a housing recovery, were at a seasonally adjusted annual rate of 3.34 million units in December, the Realtors said. They had jumped 4.7 percent in November and 1.3 percent in October.
New-home sales also advanced in October but were unchanged a month later.
Although December's new-home sales figures will not be available until Friday, builders and lenders have reported increased buyer interest recently. Builders boosted construction of new homes last month.
Analysts attributed much of the increase in housing activity to interest rates, which averaged 8.5 percent in December for 30-year, fixed-rate mortgages. That was the lowest since the mid-1970s.
"Low mortgage rates are holding the housing sector together," said Realtors president Dorcas T. Helfant. "Despite the lackluster economy, buyers are getting into the market while rates are this favorable."
Sales activity continued to be concentrated in the lower- to middle-price ranges, particularly among buyers purchasing their first homes. But Realtors economist John A. Tuccillo said more second- and third-time buyers will begin shopping for bigger, more expensive homes as the economy rebounds.
The South posted a resale rate of 1.35 million units in December, down 0.7 percent from the previous month. The 1991 sales pace was down 1.7 percent, to 1.302 million units from a year earlier.
Business writer Charlyne H. McWilliams contributed to this story.