Good Housing News from NAR & RealtyTrac, but is a Slowdown on the Horizon

The NAR released their 4th Quarter Housing Statistics today and showed increased sales & year over year price gains in many metro areas.

Lawrence Yun , NAR chief economist, said the first-time home buyer tax credit was the dominant factor. “The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates,” he said. “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”

Existing-home sales in the West jumped 16.2 percent in the fourth quarter to an annual rate of 1.38 million and are 18.2 percent above a year ago. The median existing single-family home price in the West was $227,200 in the fourth quarter, which is 8.9 percent below the fourth quarter of 2008, but with many areas showing notable gains.

“Markets in the West such as San Francisco, San Jose and Denver are showing double-digit price increases, and other markets like San Diego and Anaheim have begun to firm up,” Yun said.

In other good news, RealtyTrac’s January 2010 Foreclosure report shows a 10% decline in foreclosure activity nationwide.

“January foreclosure numbers are exhibiting a pattern very similar to a  year ago: a double-digit percentage jump in December foreclosure activity  followed by a 10 percent drop in January,” said James J. Saccacio, chief  executive officer of RealtyTrac  “If history repeats itself we will see a surge in the numbers over the next few  months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”

While the news is good, I’m guessing it will be temporary as the home buyer tax credit expires, the Fed’s program to buy mortgage backed securities ends & the banks foreclosure activity picks up after a seasonal holiday slowdown.

It’s going to be an interesting spring for the housing market.