Existing-home sales rose in January for the third time in the last four months, according to the National Association of Realtors (NAR).
January sales – completed transactions – were up 4.3 percent from December to a seasonally adjusted annual rate of 4.57 million. December’s total was revised downward to 4.38 million from 4.61 million. The January 2012 sales pace was up 0.7 percent from January 2011.
The median price of an existing-home was $154,700 in January, down 2 percent from January 2011, falling to its lowest level since November 2001. After appearing to stabilize at low levels in the first half of 2011, prices are dipping again.
According to the NAR, distressed homes – foreclosures and short sales, which sell at deep discounts – accounted for 35 percent of January sales (22 percent were foreclosures and 13 percent were short sales), up from 32 percent in December; they were 37 percent in January 2011.
Price recovery depends on a reduction in the number of distressed properties on the market. All cash transactions, NAR reported, accounted for 31 percent of sales.
Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.
The month-month increase – 190,000 —was the largest in both numbers and percentage since last August when sales increased 360,000, a jump of 8.9 percent. Despite the month-month increase in sales, the January pace was well below the pre-recession sales of 5.06 million existing homes sold and the cyclical peak of 6.49 million in November 2009 when the homebuyer tax credit boosted sales.
Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.
Regionally, existing-home sales in the Northeast rose 3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. The median price in the Northeast was $225,700, 4.2 percent below January 2011.
Existing-home sales in the Midwest increased 1.0 percent in December to 980,000, 3.2 percent higher than January 2011. The median price in the Midwest was $122,000, down 3.9 percent from a year ago.
In the South, existing-home sales rose 3.5 percent to 1.76 million in January, unchanged from a year ago. The median price in the South was $134,800, 0.3 percent below January 2011.
Existing-home sales in the West jumped 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. The median price in the West was $187,100, down 1.8 percent from a year ago.
By: Mark Lieberman, Five Star Institute Economist – 02/22/2012