New home sales drop 9.2% in January

New home sales dropped 9.2% in January according to a Commerce Department report released this morning - well below analyst expectations.

Still, the biggest drop in sales was in the Midwest, followed by the Northeast.

Southern California home sales have dropped as well; however, not as nearly as much as in some areas. In fact, area real estate agents claim the supply of homes in Los Angeles and Orange counties is dwindling. Since there are still a large number of interested buyers, some think a another run-up in prices is set to take place this spring.