No job growth prices start declining again. It’s pretty simple.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aB29XFI8nQxc&pos=1
Feb. 26 (Bloomberg) — Sales of previously owned U.S. homes unexpectedly declined in January for a second month, signaling the benefits from a government’s extension of a tax credit are being limited by lack of job growth.

Purchases fell 7.2 percent, the second-largest decline ever, to an annual pace of 5.05 million, the National Association of Realtors said today in Washington. In December, sales decreased a record 16.2 percent. The median sales price was unchanged from the same month last year, the group said.

The federal tax incentive helped drive purchases in the second half of 2009 and its extension in November may have trouble generating as much demand in coming months. Mounting distressed sales are making it harder to clear inventories, indicating job growth is required to sustain the recovery in the housing market.

“The recovery in housing is likely to be a lot more prolonged than many had hoped,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Outside of the tax credit, there isn’t that much improvement.”