Home Sales Pick Up in December

January 24, 2012 1:22 am

The latest numbers from the National Association of Realtors® (NAR) show that existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above a year ago.

The latest monthly data shows total existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

Lawrence Yun, NAR chief economist, believes these could be the early signs of what may be a sustained recovery for housing. For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010. NAR President Moe Veissi says that the American Dream of homeownership is alive and well, and that more buyers are expected to take advantage of favorable market conditions in the coming year.

This could indeed be the case based on the latest inventory statistics. NAR reports that total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November. Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.

"The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future," Yun says. In the meantime, prices are ripe for would-be homebuyers. The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes - foreclosures and short sales - accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010. All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010.

Investors account for the bulk of cash transactions. Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.


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