Lisa Mentons Blog

Existing Home Sales - February Report

Home Sales Pace

For the fifth time in six months, sales of existing U.S. homes rose in December, according to the National Association of Realtors.

Sales made a strong showing with a12.3 percent jump from November, up to a seasonally adjusted annual rate of 5.28 million. The new figure was, however, 2.9 percent below the pace from a year earlier when sales were still being influenced by the extended first-time buyers credit.

Still the NAR is happy with the sales uptick. "December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery," said Lawrence Yun, NAR chief economist. "The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain."

Prices have been trending in the opposite direction of sales, as the national median existing-home price fell for the sixth consecutive month. The new median price for the country is down to $168,800, from a downwardly adjusted $170,200 in November and down 1.0 percent from December 2009.

The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Sales Pace by Region

Sales rose all around the country, with every region posting double-digit gains. Sales in the West climbed 16.7 percent to an annual level of 1.33 million units. Sales were down by 5.6 percent from the year before though.

The Northeast had the next best sales increase with 13.0 percent jump to an annual rate of 870,000 homes in December. That is off 5.4 percent from the previous year.

Sales in the Midwest surged 11.0 percent to an annual pace of 1.11 million, but they were down 4.3 percent from December 2009.

In the South, sales picked up by 10.1 percent to an annual rate of 1.97 million. Compared with the previous year, sales were down 2.5 percent.

Home Prices

The median home price, the point at which half of all homes are sold for more and half are sold for less, dropped in the Northeast and West but rose in the other two regions..

In the Northeast, the median price fell to $237,300 from $242,500 and it was down 1.4 percent over last year's price.

The median price in the Midwest barely increased to $139,700 from $139,500 in November. The most recent price is up 3.3 percent from December 2009 figures.

In the South, the price rose to $148,400 from $146,700 the previous month and was unchanged from the year before.

The median price in the West sank to $204,400 in December from $212,500. It was down 5.6 percent from the year before.

Inventory

Inventory fell for the fourth straight month in December, dropping 4.2 percent to 3.56 million homes on the market. At the current sales pace, that represents an 8.1-month supply, down from a 9.5-month supply the month before.

Courtesy of realestateabc.com