Existing Home Sales Drop in December while Prices Continue Upward

by devteam January 22nd, 2013 | Share

Existing homes sold</bin December at a seasonally adjusted annual rate of 4.94 million homes accordingrnto the National Association of Realtors®. rnThis is a 1.0 percent reduction in sales from November where the revisedrnestimate was 4.99 million, down from an original estimate of 5.04 million.  Existing home sales include single-familyrnhouses, townhomes, condominiums, and co-operative apartments.   </p

The preliminaryrnestimate for sales during 2012 is 4.65 million, up 9.2 percent from 4.26rnmillion in 2011 and the highest volume since 2007 when existing home salesrntotaled 5.03 million.  It was also thernstrongest annual increase since 2004.</p

Thernnational median existing-home price for all housing types was $180,800 inrnDecember, 11.5 percent above the December 2011 price of $209,500.  This isrnthe strongest increase since November 2005 when the median price jumped 12.9rnpercent and it is the 10th consecutivernmonth of year-over-year price gains.  Thernlast time the market had 10 straight increases was August 2005 to Mayrn2006. </p

For all ofrn2012, the preliminary median existing-home price was $176,600, up 6.3 percentrnfrom $166,100 in 2011.  It was thernstrongest annual price gain since 2005 when the median price rose 12.4 percent.</p

LawrencernYun, NAR chief economist, said pent-up demand is sustaining the market. rn”Record low mortgage interest rates clearly are helping many home buyers, butrntight inventory and restrictive mortgage underwriting standards are limitingrnsales.  The number of potential buyersrnwho stayed on the sidelines accumulated during the recession, but they startedrnentering the market early last year as their financial ability and confidencernsteadily grew, along with home prices.  Likely job creation and householdrnformation will continue to fuel that growth.  Both sales and prices willrnagain be higher in 2013.”</p

Single-familyrnhome sales slipped 1.4 percent to a seasonally adjusted annual rate of 4.35rnmillion in December from 4.41 million in November while condominium and co-op sales were up 1.7 percent torn590,000 from 580,000.  On an annual basisrnsingle family sales were up 11.5 percent from 3.90 million-units inrnDecember 2011 while condo and co-op sales inrnNovember rose 22.9 percent from 480,000-units.   </p

The preliminary estimate of total single family sales inrn2012 is 4.127 million compared to 3.787 million in 2011.  Condo and coop sales are expected to total 528,000,rnup from 477,000 in the prior year.  </p

Thernmedian single-family home price was $180,300 in December, up 10.9 percent fromrna year ago and the median condo price was 16.0rnpercent higher at $184,100.   Thernrespective prices of the two housing types in December 2011 were $209,800 andrn$206,800.</p

Housingrninventory at the end of December was 1.82 million existing homes available forrnsale, down 8.5 percent from November. rnThis is a 4.4-month supply at the current sales pace compared to 4.8rnmonths in November, and is the lowest inventory since May of 2005, near thernpeak of the housing boom, when it was 4.3 months.  Listed inventory is 21.6 percent below a yearrnago when there was a 6.4-month supply and raw unsold inventory is at the lowestrnlevel since January 2001 when there were 1.78 million homes on the market.</p

Foreclosuresrnrepresented 12 percent of home sales in December and another 12 percent werernshort sales.  This was up from a 22rnpercent share for all distress sales in November but well below the total of 31rnpercent one year earlier.  Foreclosuresrnsold for an average discount of 17 percent below market value in December,rnwhile short sales were discounted 16 percent.</p

NARrnPresident Gary Thomas said, “Although tight inventory is limiting home sales inrnmany areas, overall sales are expected to stay on an upward trend.  Thernbiggest impact of tight inventory is upward pressure on home prices, but afterrnvalues fell below replacement construction costs, prices are still affordablernin most of the country.”</p

First-timernbuyers accounted for 30 percent of purchases in December, unchanged fromrnNovember and investors purchased 21 percent, up from 19 percent.  All-cash sales were at 29 percent ofrntransactions in December, compared with 30 percent in November and 31 percentrnin December 2011.  </p

The medianrntime on market for all homes was 73 days in December, up from 70 days inrnNovember, but is 26.3 percent below 99 days in December 2011.  Short salesrnwere on the market for a median of 117 days, foreclosures typically sold in 45rndays, and non-distressed homes took 74 days.  Thirty-one percent of allrnhomes sold in December were on the market for less than a month.</p

Existing-home sales in the Northeast rose 3.2 percent to an annual raternof 640,000 in December and are 10.3 percent above December 2011.  The median price in the Northeast wasrn$231,600, up 5.3 percent from a year ago.</p

In the Midwest sales fell 5.9 percent in December to a pace of 1.12rnmillion but are 15.5 percent higher than a year ago.  The median price inrnthe Midwest was $144,800, which is 12.3 percent above December 2011.</p

Sales in the South were at an annual rate of 1.95 million, down 3.0rnpercent on a monthly basis but up 14.7 percent from December 2011.  The median price in the South wasrn$161,100, up 11.0 percent from a year ago.</p

Western regional sales were up 5.1 percent to 1.23 million in Decemberrnand are 8.8 percent higher than a year ago.  The median price in the Westrnwas $239,900, which is 17.3 percent above December 2011.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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