Biggest existing home sales drop in 17 years

Housing demand down 8.4 percent last year; Dec. sales off 0.8 percent
Updated: 12:47 p.m. PT Jan 25, 2007

"Sales of existing homes fell in December, closing out a year in which demand for homes slumped by the largest amount in 17 years."

"After a five-year boom, housing slowed significantly last year, which has caused ripple effects throughout the economy with rising job layoffs in construction and other housing-related industries."

"David Lereah, chief economist for the Realtors, said that even with the December setback, he still believes that sales of existing homes have hit bottom and will start to gradually improve.

"He said that in 2005, 40 percent of the market represented purchases of second homes and investors buying homes looking to resell them for quick profits."

"He said that speculators had now left the market and that should leave sales at a more sustainable level."

“With fingers and toes crossed, it appears that we have hit bottom in the existing home market,” he said." Full Article.