Existing home sales take a dip
According to the National Association of Realtors (NAR), existing home sales dipped 5.1 percent in January from December’s revised sales numbers. This places sales at their lowest level since July 2012, which they blame squarely on the perpetual inventory shortages, which also serves to continue lifting prices, which is good news to some (homeowners) and bad news to others (buyers).
Dr. Lawrence Yun, NAR chief economist, also stated that unusual weather is playing a role. “Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception. Some housing activity will be delayed until spring.”
“At the same time,” Dr. Yun added, “we can’t ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates. These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact.”
Median existing home price
NAR reports that the median existing home price for all housing types was $188,900 in January, up a whopping 10.7 percent from January 2013.
Distressed homes accounted for 15 percent of sales (11 percent were foreclosures, and only 4 percent were short sales), down from 24 percent in January 2013. Foreclosures sold for an average discount of 16 percent below market value and short sales were discounted 13 percent.
Housing inventory levels
Although NAR cites ongoing inventory problems, housing inventory did rise 2.2 percent for the month, and rose 7.3 percent compared to January 2013. Inventory now represents a 4.9-month supply at the current sales pace.
The median time on market was 67 days in January, down from 72 days in December and 71 days on market in December 2013. Non-distressed homes sold in 66 days, foreclosures typically sold in 58 days, and short sales spent 150 days on the market. NAR reports that nearly one in three homes sold in January were on the market for less than a month.
Who’s buying right now?
The number of first time buyers are slowly dwindling, hitting 26 percent of all sales in January, down from 27 percent in December and 30 percent in January 2013.
The trade group said in a statement, “This is the lowest market share for first-time buyers since NAR began monthly measurement in October 2008; normally, they should be closer to 40 percent.”
Fully 33 percent of sales were paid for with cash, up from 32 percent in December and 28 percent in January 2013. Individual investors, who account for many cash sales, purchased 20 percent of homes in January, compared with 21 percent in December and 19 percent in January 2013. Seven out of 10 investors paid cash in January.
Regional performance varies
Existing-home sales in the Northeast declined 3.1 percent to an annual rate of 620,000 in January, and are also 3.1 percent below January 2013. The median price in the Northeast was $241,100, up 6.6 percent from a year ago.
Existing-home sales in the Midwest dropped 7.1 percent in January to a pace of 1.04 million, and are 8.8 percent below a year ago. The median price in the Midwest was $140,300, which is 7.6 percent higher than January 2013.
In the South, existing-home sales declined 3.5 percent to an annual level of 1.95 million in January, but are 1.6 percent higher than January 2013. The median price in the South was $161,500, up 9.4 percent from a year ago.
Existing-home sales in the West dropped 7.3 percent to a pace of 1.01 million in January, and are 13.7 percent below a year ago. Sales in the West are attenuated by tight inventory in many areas, pushing the median price to $273,500, up 14.6 percent from January 2013.
