August 2013 Existing Home Sales Top Highest Level Since February 2007

Existing homes in August 2013 were at the highest level seen since February 2007 according to the National Association of Realtors® (NAR). At a seasonally adjusted annualized rate (SAAR) of 5.48 million, sales were up 13.2 percent from a year ago (4.84 million) and increased 1.7 percent sequentially from July 2013 (5.39 million). The August median home price of $212,100 was up 14.7 percent from August 2012, which has now increased 18 consecutive months on a year-over-year comparison.

On a 12-month moving average basis, a better way to view trends and remove the potential noise in just one month of data, existing home sales increased 11.6 percent to a 5.03 million SAAR. Using the same 12-month moving average methodology, median home prices rose 11.4 percent year-over-year to $189,700.

  • All cash sales made up 32 percent of the closings in August 2013 compared to 27 percent a year ago and 31 percent in July 2013
  • Investors accounted for 17 percent of buyers in August 2013 versus 18 percent one-year ago. 75 percent of investors paid cash in August 2013
  • Distressed sales (foreclosures and short sales) tallied just 12 percent of all sales in August 2013, the least amount recorded since NAR began tracking the statistic in October 2008
  • Foreclosures made up 8 percent of all sales in August 2013 and sold at an average discount of 16 percent when compared to non-distressed home sales
  • Short sales represented just 4 percent of all sales volume and sold at a 12 percent discount versus non-distressed real estate
  • The 2.25 million homes available for sale in August 2013, equates to a 4.9 month inventory, down 6.3 percent from a year ago. Most economists peg six months inventory as a normal level
  • 17 percent of all sales in August 2013 sold for more than the original asking price, 63 percent sold for less, while one-out-of five homes sold for the list price
  • Homes were on the market a median 43 days in August 2013, compared to 70 days one year ago. Non-distressed sales typically sold in 41 days, foreclosures 52 days, and short sales a median 98 days

The following graph shows the relationship between sales and prices using a 12-month moving average.

9-24-13 graph

Housing is getting close to once again entering a normal market, which in my opinion will be when the 12-month moving average SAAR sales rate hits six million.

Given limited inventory, home values should continue to increase. In my opinion, home prices will increase in the coming 12 months, but at one-half of the current level of gain. Still, housing will outperform expected inflation.

Click to read the entire NAR press release.


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