There were some big smiles among workers in the housing industry when the latest sales numbers were released. N.C. State University economist Mike Walden talks about the source of that optimism?
“Well nationally … saw that in December, December of 2010, nationwide there were 5.2 million existing homes sold. And that was a 12 percent increase over the level of sales in November. Also the available supply of homes fell to a supply of eight months. The standard that is for normal is around six months. So we saw improvement on both of these — booth on the demand side in terms of sales and on the supply side in terms of available supply.
“So this was good news, and most people who look at the housing market were excited about this. But we have a long way to go. Sales in December 2010 were still lower than sales a year earlier, and the pace of sales is still way below what we had prior to the recession. Again we sold 5.2 million existing homes in December of last year, but before the recession we were selling homes at the rate of 7 million each month.
“So the bottom line here is it looks like, based on the end of the year 2010, the housing market was going in the right direction, but it still has a very, very long way to go.”