Existing Home Sales End Year on Higher Note

Existing home sales yo-yoed again in December.  The National Association of Realtors® (NAR) said total salesrnof existing homes, including single family residences, condominiums, and co-opsrnwere estimated at a seasonally adjusted annual rate of 5.04 million, a 2.4rnpercent increase from November rate of 4.92 million. November’s sales hadrnfallen off a 5.25 million pace in October, the best month for sales in over arnyear.  NAR said December’s salesrnrepresented the sixth time in seven months that sales have exceeded 5 million unitsrnand NAR noted that the increase came despite a tightening of inventory inrnDecember.  </p

December sales were up 3.5 percent from the pace in Decemberrn2013.  This was the third straight monthrnthat existing home sales were higher than year earlier levels. </p

Single-family home sales increased 3.5 percent to a seasonally adjustedrnannual rate of 4.47 million in December from 4.32 million in November and werern4.0 percent above the 4.30 million pace a year ago. Existing condominium andrnco-op sales had a sales rate of 570,000 units in December, unchanged from arnyear earlier but down 5.0 percent from the 600,000 pace reported for November. </p

Lawrence Yun, NAR chief economist, says sales picked up in December to closerna 2014 that got off to a sluggish start but showed encouraging signs ofrnactivity the second half of the year. “Home sales improved over the summer oncerninventory increased, prices moderated and economic growth accelerated,” hernsaid. “Sales were measurably better in the second half – up 8 percent comparedrnto the first six months of the year.”</p

The median existing-home price for all housing types in December wasrn$209,500, which is 6.0 percent above the December 2013 median and marks the 34^{th</supconsecutive month of year-over-year price gains.  Single-family homes had a median price ofrn$210,200, an increase of 6.3 percent from a year earlier while existing condornunits sold for a median price of $204,000, a 3.2 percent increase.</p}

NAR reported that for all of 2014, there were 4.93 million existing home sales,rna 3.1 percent decline from total 2013 sales of 5.09 million. The nationalrnmedian existing-home price for the year was $208,500, the highest since 2007’srnmedian of $219,000 and a 5.8 percent increase from $197,100 in 2013. </p

Total inventory at the end of December dropped 11.1 percent to 1.85 millionrnexisting homes available for sale, a 4.4-month supply at the current sales pace.  The inventory was estimated at 5.1 months inrnNovember. Unsold inventory is now 0.5 percent lower than a year ago (1.86rnmillion).</p

“A drop in housing supply in December raises some affordability concerns inrnthe months ahead as minimal selection and the potential for faster pricernappreciation could offset the demand from buyers encouraged by a strongerrneconomy and sub-4 percent interest rates,” Yun said. “Housing costs – bothrnrents and home prices – continue to outpace wages and are burdensome forrnpotential buyers trying to save for a downpayment while looking for availablernhomes in their price range.”</p

The mix of buyers shifted slightly in December with the share of first-timernbuyers falling from 31 percent in November to 29 percent while the investorrnshare increased by 2 percentage points to 17 percent.  First-time buyers also represented 29 percentrnof buyers for the entire year. rnSixty-three percent of individual investors paid cash for their homernpurchases and all cash sales presented 26 percent of all existing home salerntransactions, up from 25 percent in November. rn  </p

NAR says that the annual share of first-time buyers is at the lowest levelrnin nearly three decades, but NAR President Christ Polychron has hopes that thernhalf-point reduction in annual FHA mortgage premiums will help increase thosernnumbers when it goes into effect next week. rn “NAR is a strong supporter of thernFHA and its vital role in the mortgage marketplace for homebuyers,” he said.rn”Realtors support responsible lending to qualified borrowers and the move tornlower premiums will enable more buyers to enter the market while continuing tornprotect taxpayers from the risky lending practices that led to the housingrncrash.”</p

Distressed sales – foreclosures and short sales – were up slightly inrnDecember to 11 percent from 9 percent in November but are down from 14 percentrna year ago. Eight percent of December sales were foreclosures and 3 percentrnwere short sales. Foreclosures sold for an average discount of 15 percent belowrnmarket value in December compared to 17 percent in November.  Short sales were discounted 12 percent, onernpoint below the November number.       </p

Properties typically stayed on the market for 66 days in December, one dayrnmore than the previous month but down from 72 days a year earlier.  Short sales were on the market the longest atrna median of 98 days while foreclosures sold in 61 days and non-distressed homesrntook 66 days. Thirty-one percent of homes sold in December were on the marketrnfor less than a month.</p

December existing-home sales in the Northeast declined 2.9 percent to anrnannual rate of 660,000, but are 3.1 percent above a year ago. The median pricernin the Northeast was $246,600, an annual increase of 3.2 percent.</p

In the Midwest, existing-home sales fell 3.5 percent to an annual level ofrn1.09 million in December, and are now 2.7 percent below December 2013. Thernmedian price increased by 5.3 percent to $159,100. </p

Existing-home sales in the South climbed 3.8 percent to an annual rate ofrn2.17 million in December, and are 7.4 percent above December 2013. The medianrnprice in the South was $184,100, up 6.6 percent from a year ago.</p

Existing-home sales in the West jumped 9.8 percent to an annual rate of 1.12rnmillion in December, and are 2.8 percent above a year ago. The median price inrnthe West was $299,600, which is 5.6 percent above December 2013.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.