Existing Home Sales Rise 6%, Short Sales not a Factor

by devteam December 21st, 2012 | Share

Existing homernsales rose 5.9 percent in November to a seasonally adjusted annual rate of 5.04rnunits compared to a rate of 4.76 units in October.  October’s rate was a downward revision fromrnthe 4.79 million originally reported. rnNovember’s sales were up 14.5 percent from the 4.40 million unit salesrnpace in November 2011 and were the highest since November 2009 when the rate ofrnsales reached 5.44 million.  Data on existingrnhome sales, which are completed transactions including single-family homes,rntownhomes, condominiums and co-ops, was released this morning by the NationalrnAssociation of Realtors® (NAR).  </p

Single-familyrnhome sales were at a seasonally adjusted annual rate of 4.44 million comparedrnto 4.21 million in October, an increase of 5.5 percent, and are 12.4 percentrnhigher than in November 2011. rnCondominium and co-op sales were up 9.1 percent to an annual rate ofrn600,000 in November, an increase of 50,000 month-over month and 33.3 percentrnhigher than the 450,000 unit pace of sales a year earlier.</p

Lawrence Yun, NAR chief economist,rnsaid there is healthy market demand.  “Momentum continues to build in thernhousing market from growing jobs and a bursting out of household formation,” hernsaid.  “With lower rental vacancy rates and rising rents, combined withrnstill historically favorable affordability conditions, more people are buyingrnhomes.  Areas impacted by Hurricane Sandy show storm-related disruptionsrnbut overall activity in the Northeast is up, offset by gains in unaffectedrnareas.”</p

Existing Home Sales</p


The median price of an existing homernrose $180,000 in November from the median price one year earlier becoming thernninth consecutive month in which annual prices rose.  The median price for a single family home wasrn$180,600, 10.1 percent higher than in November 2011 and the median existingrncondo price was $181,000 representing a 10.6 percent annual increase.</p

Thernmedian existing single-family home price was $180,600 in November, up 10.1rnpercent from a year ago.  The median existing condo price was $181,000, 10.6rnpercent higher than in November 2011.</p

Foreclosures accounted for 12rnpercent of home sales and short sales for 10 percent.  The two types of distressed sales togetherrnhad a 24 percent market share in October and a 29 percent share in Novemberrn2011.  Foreclosures sold for an averagerndiscount of 20 percent below market value while short sales were discounted 16rnpercent. Yun is projecting that the market share of distressed properties willrnfall into the teens next year as the numbers of seriously delinquent mortgagesrndwindle.  </p

NAR President Gary Thomas saidrnthere’s been speculation of a rise in short sales before the end of the yearrnwith pending expiration of the Mortgage Forgiveness Debt Relief Act. rn”However, there’s been no movement in short sales, their market share isrnstaying in a narrow range, and they’re still taking much longer to sell -rntypically three months,” he said.</p

“The fact remains it is extremelyrndifficult to expedite a short sale, and banks’ response to client urgency isrnonly starting to improve,” Thomas said.  “However, we’re hopeful that thernact will be extended before it expires on December 31 so sellers don’t have tornpay taxes on forgiven mortgage debt, which would be unfairly treated as incomernfor owners who are selling under duress.” </p

Total housing inventory at the endrnof November fell 3.8 percent to 2.03 million existing homes available for sale,rna 4.8-month supply at the current sales pace. rnThis is the lowest inventory since September of 2005 when it was 4.6rnmonths. In October the inventory was 5.3 months and in November 2011 there wasrna 7.1-month supply.  </p

The median time on market for allrnhomes was 70 days in November, slightly below 71 days in October, but is 28.6rnpercent below 98 days in November 2011.  Thirty-two percent of homes soldrnin November were on the market for less than a month, while 20 percent were on thernmarket for six months or longer; these findings are unchanged from October.</p

First-time buyers accounted for 30rnpercent of purchases in November, down from 31 percent in October and 35rnpercent in November 2011 and investors accounted for 19 percent compared to 20rnpercent in October.  </p

Existing-homernsales in the Northeast rose 6.9 percent to an annual rate of 620,000 inrnNovember and are 14.8 percent above November 2011. rnThe median price in the Northeast was $232,900, down 2.0 percent from a yearrnago.</p

Inrnthe Midwest existing home sales increased 7.2 percent to a pace of 1.19 millionrnand are 21.4 percent higher than a year ago.  The median price in thernMidwest was $141,600, 7.0 percent above November 2011.</p

Existing-homernsales in the Southern region were up 7.9 percent to 2.04 million in Novemberrnand are 17.2 percent above November 2011.  The median price in the South was $157,400, up 10.5 percent fromrna year ago.</p

Ongoingrninventory constraints held back sales in the West to an increase of 0.8 percentrnin November over October and a 4.4 percent increase since the previousrnNovember.  Sales were at a pace of 1.19rnmillion. Those same constraints have driven the median price in the region torn$248,300, a 23.9 percent annual increase.

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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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