Lower Home Prices Lead to Increased Sales

Under a headline which read "Lower Home Prices Lead to Increased Sales" was the following article in Real Trends Newsletter.

Thanks to much higher sales in places like California, the December average of home sales in 56 markets across the country rose 9.73 percent from November and 11.36 percent above December 2007 sales, according to the Associated Press-RE/MAX Monthly Housing Report Year. Year-over-year sales increases in California were up 75 percent in the Los Angeles metro area and up 44 percent in San Diego. Other sharp increases were recorded in Las Vegas, up 82 percent, Phoenix, up 69 percent, and Miami, up 69 percent. The report had some other good news - inventories are beginning to recede. The average number of homes for sale on the market was down 7.69 percent from November and down 3.93 percent from a year ago. Many analysts believe than reduced inventories may signal the beginning of the end for the current down cycle in housing. REAL Trends comment: We have been saying for months that once affordability returns to markets there is ample evidence that both first time homebuyers and investors will return. The report from RE/MAX/Associated Press is one more piece of data that confirms this.