January 2013 Existing Home Sales With Strengthening Tail Winds
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Existing home sales gained speed in the first month of 2013, up 9.1 percent in January 2013 when compared to the same month in 2012, as reported by the National Association of Realtors® (NAR). At the current rate observed in January 2013, sales are on an ascent to 4.92 million dwellings contrasted to a 4.51 million pace in January 2012. The median price for all types housing elevated 12.3 percent when compared to January 2012, rising to $173,600.
The 12-month moving average (stated on seasonally-adjusted, annualized rates) of the number of homes sold rose 9.7 percent in January 2013 to 4.695 million homes. [I prefer to use the 12-month moving average to smooth the data from month-to-month and more readily view the trend.] These data are shown in the following graph.
The 12-month moving average of median prices reveals a 7.8 percent increase in January 2013 from the same period in 2012, at $177,000. Prices are now 21.1 percent less than the peak observed in July 2006. From the peak to the trough prices declined 29 percent. Thus 27.2 percent of the housing bubble price decline has now been recovered.
- Inventory is down 25 percent year-over-year, with just 4.2 months supply given the latest purchase levels (six months considered normal, therefore price increases will continue)
- Current inventory is the least recorded since December 1999
- Potential buyer traffic is up 40 percent in the past 12 months
- First-time homebuyers made up 30 percent of the sales versus 33 percent in January 2012
- Distressed real estate (REO or short sales) made up 23 percent of all sales in January 2013, down significantly from 35 percent in January 2012
- Short sales were on the market a median 94 days, foreclosures 47 days, and traditional sales 71 days
- Cash sales made up 28 percent of all transactions (double what several years ago was considered normal)
To read the entire report from NAR and to examine the associated statistics go to realtor.org.
The limited inventory denotes that housing is passing into seller’s market setting the stage for continued price gains. As always, remember the TINSTAANREM clause — There Is No Such Thing As A National Real Estate Market. Each real estate market is different.