In what has become a recurring pattern for the housing market, existing-home sales inched up in January while housing inventory declined, according to the latest analysis from the National Association of Realtors (NAR).
Nationally, existing-home sales were up 0.4 percent in January to an annual rate of 4.92 million, which is also a 9.1 percent increase above January 2012; however, at the same time, total housing inventory declined 4.9 percent from December to January and 25.3 percent from January 2012, falling to just 1.74 million units, or a housing inventory of 4.2 months.
Existing-Home Sales Up, Housing Inventory Down
That’s the lowest level of housing inventory since April 2005, and according to Lawrence Yun, NAR’s chief economist, the low housing inventory levels are putting constraints on what is a considerable buyer demand.
“Buyer traffic is continuing to pick up, while seller traffic is holding steady,” Yun said. “In fact, buyer traffic is 40 percent 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 … 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.”
NAR’s existing-home sales report is always a bonanza of data, and some of the most notable stats included:
- One area of the housing market emboldened by the low housing inventory numbers is median existing-home price, which rose nationally by 12.3 percent year-over-year; that’s the strongest gain since November 2005, and the 11th consecutive month of yearly price increases.
- Distresses property sales accounted for 23 percent of all January sales, down from 24 percent in December and 35 percent in January 2012.
- Single-family home sales and existing-condo sales behaved in a similar manner, with home sales up 0.2 and 1.8 percent, respectively, while median price increased 12.6 and 9.4 percent.
- And finally, on a regional basis, existing-home sales in the Midwest rose 3.6 percent from December and 17.2 percent from January 2012, with median price up 8.6 percent from last year; meanwhile, in the South, sales rose 1.0 percent monthly and 14.0 percent yearly, and median price jumped by 13.4 percent.
Median Time on Market Continues to Improve
One other undoubtedly bright spot in NAR’s report was its findings regarding median time on market. In January, the median time on market for all homes was 71 days, down from 73 days in December and 99 days a year ago; 31 percent of all homes sold in January were on the market for less than a month.
Gary Thomas, NAR’s president, said the lessening time on market has brought a new environment to real estate agents.
“The typical home is selling nearly four weeks faster than it did a year ago,” Thomas said. “In this environment, Realtors can help buyers strike a balance between moving quickly and protecting their interests, such as making offers contingent upon a satisfactory home inspection and obtaining a loan; of course, a loan pre-qualification may help too.”