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WASHINGTON - Sales of existing homes fell in December, closing out a year in which demand for homes slumped by the largest amount in 17 years. The National Association of Realtors reported that sales of existing homes were down 0.8 percent last month, a bigger decline than had been expected. For the year, sales fell by 8.4 percent, the biggest annual decline since 1989, when existing home sales fell by 14.8 percent. The sales figure underscored the sharp contraction that is going on in the once high-flying housing market, which before last year had set sales records for five straight years. More…