The Weekend Economists' Panglossian Pandemic January 20-22, 2012

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81. Housing ends year on strong note, but prices still falling

http://bottomline.msnbc.msn.com/_news/2012/01/20/10201735-housing-ends-year-on-strong-note-but-prices-still-falling

The housing market ended the year on a positive note with strong sales in December, but a glut of unsold homes will likely push prices lower through much of this year, forecasters said Friday.

Sales of existing homes hit an 11-month high last month and the number of properties on the market fell to the lowest level in nearly seven years, according to the National Association of Realtors.

Unseasonably warm weather may have helped boost sales, but analysts said a strengthening job market and record low mortgage rates should buoy housing in coming months. Still, they were troubled by the high level of "distressed homes" for sale, including short sales of underwater properties or sales of foreclosed properties. Nearly one-third of existing-home sales were distressed last month, according to the Realtors.
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In addition, one-third of Realtors said home sales fell through last month because of declined mortgage applications or appraisals that fell short of the required values.