Existing Home Sales Struggle To Break The 5 Million Mark

Despite the beginning of the traditionally busy spring market, existing homernsales declined slightly in March, owing primarily to continuing tight inventories according to the National Association of Realtors® (NAR). rnExisting homes, which include single family houses, condominium units,rnand cooperative apartments, sold at a seasonally adjusted annual rate of 4.92rnmillion during the month, down 0.6 percent from the February rate of 4.95 millionrnbut still 10.3 percent above the 4.46 million unit pace one year earlier.  March was the 21^st consecutivernmonth in which sales were higher than during the same period one year earlier, but also the 5th consecutive month stuck between 4.9 and 5 million.</p

Sales of single-family homes were down 0.2 percent to a seasonally adjustedrnannual rate of 4.32 million compared to 4.33 million in February but were 9.1rnpercent higher than in March 2012.  Condornand co-op sales fell 3.2 percent to 600,000 units from 620,000 units thernprevious month, still 20 percent above the rate one year before.</p

The national median existing-home price for all housing types was $184,300, 11.8rnpercent higher than a year earlier and the strongest increase since a Novemberrn2005 annual increase of 12.9 percent.  Itrnwas also the 13th consecutive months of year-over-year price increases whichrnlast happened during the May 2005 to May 2006 period.  The median existing single-family home pricernwas $185,100, an annual increase of 12.1 percent and condo prices were at arnmedian of $178,900, 10.4 percent above March 2012.</p

Lawrence Yun, NAR chief economist, said demand is outstripping supply in therncurrent market. “Buyer traffic is 25 percent above a year ago when we werernalready seeing notable gains in shopping activity.  In the same timeframe housing inventoriesrnhave trended much lower, which is continuing to pressure home prices. The goodrnnews is home construction is rising and low mortgage rates are continuing tornkeep affordability conditions at historically favorable levels. The bad news isrnthat underwriting standards remain excessively tight, while renters are gettingrnsqueezed by higher rents.”</p

Total housing inventory at the end of March was up 1.6 percent to 1.93rnmillion available existing homes, a 4.7-month supply at the current sales pace,rnup from 4.6 months in February.  Listedrninventory remains 16.8 percent below a year ago when there was a 6.2-monthrnsupply.</p

“The inventory improvement last month results from a seasonal gain, butrnconditions continue to broadly favor sellers,” Yun said.  “We need a housing supply of over 6 months tornhave a generally balanced market between home buyers and sellers, but it’srnunlikely we’ll get there without greater increases in housingrnconstruction.”</p

Total Distressed Sales fell to 21 percent with thirteen percent of March sales accounted for by foreclosures and 8 percent shortrnsales.  Distressed sales took a 25 percent market share in February and 29 percent in March 2012.  Foreclosures sold for an average discount ofrn15 percent in March, while short sales were discounted 13 percent.</p

The homes that sold were on the market for a median of 62 days compared torn74 days in February and 91 days in March 2012. rnShort-sales took a median 81 days to sell and foreclosures 46 days.  Non-distressed homes required a median marketingrnperiod of 66 days and 37 percent of all homes sold during the month did so inrnless than one month. </p

NAR President Gary Thomas</asaid, "The typical home sold in March was on the market for one month lessrnthan it took to sell a year ago.  Multiplernbidding is becoming more common, and more homes are selling above the askingrnprice, so buyers need to move quickly and follow their Realtor^‘srnadvice for contingencies when making contract offers.”</p