Existing home sales in the United States edged up in January, while a seller’s market is developing and home prices continue to rise steadily above year ago levels, according to the latest report from the National Association of Realtors.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 0.4% and are 9.1% above January 2012. Sales rose in every region but the West, which is the region most constrained by limited inventory and Lawrence Yun, NAR chief economist, said that tight inventory is a major factor in the market.
‘Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40% above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country,’ he explained.
Total housing inventory at the end of January fell 4.9% to 1.74 million existing homes available for sale. This represents a 4.2 month supply at the current sales pace, down from 4.5 months in December, and is the lowest housing supply since April 2005 when it was also 4.2 months. Listed inventory is 25.3% below a year ago when there was a 6.2 month supply and raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
‘We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster than normal price growth,’ Yun added. The national median existing home price for all housing types was $173,600 in January, up 12.3% from January 2012, which is the 11th consecutive month of year on year price increases.
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Distressed homes, that is foreclosures and short sales, accounted for 23% of January sales, down from 24% in December and 35% in January 2012. Some 14% of January sales were foreclosures and 9% were short sales. Foreclosures sold for an average discount of 20% below market value in January, while short sales were discounted 12%.
First time buyers accounted for 30% of purchases in January, unchanged from December; and down from 33% in January 2012. Single family home sales increased 0.2% and are 8.5% above the level in January 2012 and the median existing single family home price was $174,100 in January, up 12.6% from a year ago. Existing condominium and co-op sales rose 1.8% and are 13.7% higher than a year ago – the median existing condo price was $169,600 in January, up 9.4% from January 2012.
Regionally, existing-home sales in the Northeast increased 4.8% to an annual rate of 650,000 in January and are 12.1% above January 2012. The median price in the Northeast was $230,500, up 2.4% from a year ago. Existing home sales in the Midwest rose 3.6% in January and are 17.2% higher than a year ago with the median price in the Midwest now standing at $131,800, which is 8.6% above January 2012.
In the South, existing home sales increased 1% and are 14% above January 2012 with the median price in the South around $152,100, up 13.4% from a year ago. Existing home sales in the West fell 5.7% and are 5.7% below a year ago. The median price in the West was $239,800, which is 26.6% above January 2012.