Nov 21, 2012 | Housing Analysis
After a small decline in September, Existing Home Sales rebounded in October, increasing a modest 2.1%.
The housing market’s slow, steady recovery continues as sales volume in all four regions expanded last month with the exception of the Hurricane Sandy-affected Northeast.
The National Association of REALTORS® monthly Existing Home Sales Report comprises completed sales of single-family homes, townhomes, condominiums, and co-ops. The Existing Home Sales report is compiled on a seasonally-adjusted, annualized basis. It shows a 10.9 percent sales increase as compared last year.
Sales volume might otherwise be higher, however, if not for a lack of homes for sale.
Total housing inventory fell 1.4 percent to 2.14 million homes last month which, at the current sales pace, represents a 5.4-month national supply — the lowest in more than 6 years.
The lack of supply amid burgeoning demand has led home prices higher nationwide. October’s median existing home sale price was $178,600 — an 11.1% increase from October 2011 and the eighth consecutive month during which the median sales price rose.
The last time that occurred was during the eight months ending May 2006.
In addition, the Existing Home Sales report showed that the median time on market in October rose to 71 days, up 1 day from September 2012. As compared to October 2011, however, median time on market is down 26% from 96 days.
Other noteworthy statistics from the October Existing Home Sales report include :
- Foreclosures and short sales accounted for 24% of sales
- Foreclosures sold for an average discount of 20% to market
- Short sales sold for an average discount of 14% to market
Furthermore, thirty-two percent of homes sold in October were on the market for less than one month. 20% were on the market for six months or longer.
Record-low mortgage interest rates continue to spur housing, as do low prices. Neither will last indefinitely. If you plan to purchase a home in Worcester County area in 2013, therefore, consider moving up your time frame. Home ownership will likely increase in cost as the year moves on.
Oct 30, 2012 | Housing Analysis
The home resales is expected to finish the year with strength.
Last month, for the fifth straight month, the Pending Home Sales Index hovered near its benchmark value of 100, registering 99.5 in September.
he Pending Home Sales Index tracks homes under contract to sell, but not yet sold, and is published by the National Association of REALTORS®. The index is a relative one. It compares today’s housing market activity to the housing market activity of 2001 — the index’s first year of existence.
The Pending Home Sales Index has averaged 99.1 this year.
Among housing market indicators, the Pending Home Sales Index is unique. It doesn’t report on prior market activity as the Existing Home Sales and New Home Sales reports do. By contrast, the Pending Home Sales Index is a forward-looking indicator.
The real estate trade association tell us that 80% of U.S. homes under contract go to closing within 60 days, and many of the rest go within Months 3 and 4. In this way, the monthly Pending Home Sales Index can foreshadow to today’s Worcester County area home buyers and sellers what’s next for housing.
Based on September’s Pending Home Sales Index, then, we should expect to see closed home sales stay strong through November and December. That said, home sales are expected to vary by region.
Here is how the Pending Home Sales Index broke down by area last month as compared to one year ago on a seasonally-adjusted, annualized basis :
- Northeast Region : +26.1% from September 2011
- Midwest Region : +19.3% from September 2011
- South Region : +17.6% from September 2011
- West Region : +0.8% from September 2011
Often, the last few months of a year are considered to be a “slow” period for the housing market. Based on regional, annual Pending Home Sales Index improvements, though, 2012 may be different. The market looks poised to finish with momentum that may carry home prices higher into 2013.
For today’s home buyers, mortgage rates remain low and home prices have only started to climb.
Oct 24, 2012 | Housing Analysis
As the third quarter closed, home resales showed considerable momentum nationwide.
The National Association of REALTORS® reports Existing Home Sales at 4.75 million units in September 2012 on a seasonally-adjusted, annualized basis, an 11 percent increase from one year ago.
An “existing home” is a home that’s been previously occupied; a resale.
The reading marks the second-highest tally of the year — second only to August 2012 when 4.83 million homes were sold on a seasonally-adjusted, annualized basis. The real estate trade association reports that there are now just 2.32 million previously-occupied homes for sale nationwide.
It’s the thinnest national home supply since March 2005 and, at today’s sales pace, all 2.32 million homes would sell in 5.9 months.
A 6.0-month home supply is thought to represent a market in balance. September’s home supply, therefore, suggests a market which favors sellers. Buyers in many U.S. markets may have noticed this shift. Multiple-offer situations are increasingly common and “right-priced” homes are selling quickly.
The median Time on Market is down 31 percent from last year to 70 days nationwide.
Meanwhile, for purchasers of foreclosures and short sales, September Existing Home Sales report included interesting data on the relative value of buying “distressed” property :
- Foreclosures sold at an average discount of 21% to market value last month
- Short sales sold at an average discount of 13% to market value last month
And, although distressed homes remain a large part of the U.S. housing market, their relative size is shrinking.
In September, foreclosures and short sales accounted for roughly 1 in 4 home sales. Earlier this year, that figure was 1 in 3.
For today’s Worcester County area home buyer, September’s Existing Home Sales report may be a “buy signal”. With home supplies down and demand for homes rising, home prices are poised to increase through the last three months of 2012 and into the start 2013.
Sep 28, 2012 | Housing Analysis
Nationwide, homes continue to sell briskly.
According to the National Association of REALTORS®, the Pending Home Sales Index read 99.2 for August — the fourth straight month in which the index hovered near its benchmark value of 100.
A “pending home” is a home that is under contract to sell, but has not yet closed. The index measures with fair accuracy the future strength of the U.S. housing market.
For today’s Massachusetts home buyers, the August Pending Home Sales Index is relevant for several reasons.
First, the index remains near its highest point since April 2010, the last month of that year’s federal home buyer tax credit. This implies that the current housing market is performing nearly as well as the “stimulated” market of two years ago — except without the accompanying federal stimulus.
The housing market is standing on its own, in other words.
Second, the Pending Home Sales Index suggests that today’s housing market is among the strongest of the last decade. We can make this inference because the Pending Home Sales Index is a relative index, benchmarked to the value of “100” which represents the housing market as it behaved in 2001.
2001 was strong year in housing. With today’s Pending Home Sales Index remaining near 100, it tells us that 2012 is similarly strong.
And, third, the Pending Home Sales Index is relevant because it’s a forward-looking housing metric — one of the few that are regularly published. As compared to the Case-Shiller Index or Existing Home Sales report which both report on how housing fared in the past, the Pending Home Sales Index projects 30-60 days to the future.
Based on August data, therefore, we can expect for home sales volume to remain high as 2012 comes to a close.
If you’re currently shopping for a home, you’ve likely noticed a change in the market. Multiple-offer situations are more common and sellers are regaining negotiation leverage. The longer you wait to buy, therefore, the more you may pay for a home.
Read the complete Pending Home Sales Report on the NAR website.
Sep 25, 2012 | Housing Analysis
The home resale market put forth another strong data set last week. Home sales prices are higher nationwide and sales volume has moved to a 2-year high.
According to the National Association of REALTORS®, 4.82 million “existing homes” sold on a seasonally-adjusted, annualized basis in August, representing a near 8 percent improvement from the month prior and a nine percent jump from August 2011.
An existing home is a home which has been previously occupied.
Home sales were unevenly split across price tiers, with more than half of all homes selling for less than $250,000. This suggests that the first-time home buyers and real estate investors continue to be active in today’s market as a foundation for growth is built.
According to the Existing Home Sales data :
- First-time buyers accounted for 31% of all home sales
- Real estate investors accounted for 18% of all home sales
- Other, repeat buyers accounted for 51% of all home sales
Also noteworthy is that “distressed homes” accounted for the smallest percentage of overall home sales since the real estate trade group starting tracking such data.
In August, homes in various stages of foreclosures accounted for 12% of all sales and sold at an average discount of 19 percent below market value. Short sale homes accounted for 10% of all sales and sold at an average discount of 13 percent below market value.
Of all the data in the August Existing Home Sales report, though, perhaps most relevant to today’s buyers is the shrinking national housing supply.
At August’s end, there were 2.47 million homes listed for sale nationwide, a three percent increase from the month prior. However, because the pool of available home buyers is increasing more rapidly than the number of homes for sale, housing supplies fell 0.3 months to 6.1 months.
This means that at the current pace of sales, the entire housing supply would be sold by March 2013.
For today’s home buyers, home affordability appears poised to worsen. Mortgage rates and home prices remain low today, but market conditions like these rarely last long. Talk to your real estate agent about what options you have ahead of you. 2012 is coming to a close.
By 2013, the housing recovery may be fully underway.
