Existing Home Sales Reach Highest Level In 7 Years

Existing Home Sales Reach Highest Level In 7 Years Existing home sales in December pushed 2013 sales of existing homes to a 7 year high, according to the NAR. December’s reading of 4.86 sales of pre-owned homes came in at 4.87 million on a seasonally adjusted annual basis.

Although projections had been for 4.89 million sales, the December reading topped November’s revised sales of 4.82 million pre-owned homes.

December’s reading showed the first gain in existing home sales in three months. NAR reported that existing home sales for 2013 reached 5.09 million, which represented a 9.10 percent increase over 2012.

More Good News: Median Price Of Existing Homes Rises

NAR reported that the national median price for pre-owned homes increased to $198,000, a year-over-year increase of 9.90 percent. The average price of an existing home for all of 2013 was $197,100. This was the strongest growth in existing home prices since 2005 and represented an increase of 11.50 percent.

There were 1.86 million pre-owned homes for sale in December. At current sales rates, this represents a 4.60 month inventory. Real estate pros like to see a minimum of a six-month supply of available homes, so existing homes remain in short supply.

Analysts attributed rising home prices to improving economic conditions and a persistent shortage of homes for sale.

FHFA: Slower Gain for Home Prices In November

FHFA, the agency that oversees Fannie Mae and Freddie Mac, reported that November prices of homes financed with mortgages owned or guaranteed by the two agencies rose by a seasonally adjusted 0.10 percent as compared to October’s increase of 0.50 percent and an expected growth rate of 0.40 percent.

November’s reading brought year-over-year home sales to an increase of 7.60 percent, but is still 8.90 percent below their April 2007 peak.

Analysts noted that recent reports of increasing new home construction and rising new home sales as reasons why prices of existing homes are seeing slower growth.

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RE/MAX Reports Double-Digit Yearly Gains in Sales, Prices in May

RE/MAXRE/MAX said in its National Housing Report for May that after staging a turnaround last year, the housing market is continuing on the road to stabilization in 2013.

Both home sales and prices rose at double-digit rates above May 2012, and inventory is showing signs of stability, the company reported.

According to the report, closed transactions increased in May 13.2 percent over April and 11.6 percent over the same month last year. May was the 23rd consecutive month to post higher sales on a year-over-year basis.

Of the 52 metros surveyed last month, 45 reported higher sales than May 2012, with 30 posting double-digit gains.
For all homes sold in May, the median price was $185,000, a 4.2 percent gain over April and a 10.8 percent increase over May 2012.

RE/MAX Reported

Of the markets surveyed, only three experienced a year-over-year price drop: Trenton (0.2 percent); Albuquerque (2.7 percent); and Burlington, Vermont (0.6 percent).Twenty-one metros posted double-digit price gains.

May was the fourth straight month in which both home sales and prices rose on a monthly and yearly basis.“After a few years of disappointing data, we are so pleased that a housing recovery is finally in full swing. The month of May continues the trend we’ve been seeing in 2013, steady and consistent growth,” said RE/MAX CEO Margaret Kelly. “Last year was the year of the housing turn-around and this year represents a start on the road to sustainability.”

Reduced inventory continues to be a concern, however, though recent monthly changes have been promising. The number of homes for sale was down just 0.9 percent from April, showing inventories “may be in the early stages of a return to more balanced levels.” Year-over-year, inventory was down 28.4 percent. The corresponding months supply in May was 3.5, far below the balanced level of 6 months.

The combination of low supply and high demand led to a significant drop in listing times for homes sold in May. According to RE/MAX, the average days on market was 70, a full week lower than the April average and 22 days lower than last year.

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Existing Home Sales Numbers Highest Since 2009

Existing Home SalesThe National Association of REALTORS reported that existing home sales in April reached 4.97 million on a seasonally-adjusted annual basis.

Although this reading fell short of Wall Street’s expectations of 5.00 million existing homes sold, it surpassed the March 2013 upwardly revised reading of 4.94 million existing home sales. This represents a 0.60 percent increase from March to April, and a 9.70 increase year-over-year.

Low Mortgage Rates Contribute To Rise in Existing Home Sales

Low mortgage rates and pent-up demand for homes are driving sales of existing homes, which reached their highest level since November 2009.

Lawrence Yun, chief economist for the National Association of REALTORS, indicated that housing market momentum is overcoming obstacles: “The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing home sales would be well above the five million unit pace.”

Inventories of homes for sale are gradually increasing; at the end of April, the total inventory of existing homes had increased by 11.9 percent to 2.16 million existing homes for sale. This represents a 5.20 month supply of available homes in April as compared to a 4.7 month supply of homes in March 2013. Listed inventory is 13.60 percent below April 2012, when there was a 6.60 month supply of homes available.

Average Home Sales Prices Up 14 Months In A Row

The national average price for all housing types was $192,800, and increase of 11.0 percent over April 2012. This represents the fourteenth consecutive month of rising average home prices; the last time this occurred was between April 2005 and May 2006.

Homes sold through foreclosure or short sales fell by three percent to 18 percent of existing homes sold in April.  Of these sales, 11.0 percent were foreclosure sales and 7.0 percent were short sales. Foreclosure sales averaged 16.0 percent below market value and short sales averaged 14.0 percent below market value.

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, provided more positive news for U.S. housing markets as of March 2013. Average home prices for homes mortgaged by Fannie Mae and Freddie Mac increased by 7.20 percent year-over-year, and were up by 1.20 percent from February 2013. FHFA also reported that home prices had risen by 6.70 percent in the first quarter of 2013 as compared to the same period in 2012.

New Home Sales Show Rising Trend As Well

In related news, the Department of Commerce reports that New Home Sales are up by 2.30 percent from March to 454,000 units on a seasonally-adjusted annual basis.  This handily exceeds Wall Street’s consensus of 430,000 new homes sold in April, and is also higher than March’s reading of 444,000 new homes sold.

Buyers are turning to new homes due to pent-up demand in housing markets caused by low inventories of existing homes and low mortgage rates. It’s also likely that with home prices rising, would-be buyers are acting on indications that record low rates and home prices are expected to increase.

Rising home prices suggest that as demand increases, mortgage rates may not be far behind. Buyers in the market today can still gain the advantage of historically low mortgage rates.

Wondering what your home is worth? Let me Show You.