December existing-home sales dipped 3.6 percent month-over-month, but the year was still the best since 2006
Existing-home salesnbsp;decreased 3.6 percent to a seasonally adjusted annual rate (SAAR) of 5.57 million in December mdash; dipping from a downwardly revised 5.78 innbsp;November, the National Association of Realtors (NAR) reported today.
This monthrsquo;s sales pace is 1.1 percent above December 2016 and is the strongest sales pace in 11 years.
A healthy economy drove buyer demand in 2017
The median existing-home price for all housing types in rose 5.8 percent to $246,800, making December the 70th month in a row to see year-over-year gains.
Total housing inventory fell 11.4 percentage points month-over-month to 1.48 million homes for sale, while year-over-year inventory dropped 10.3 percentage points. It was the 31st consecutive month of year-over-year declines.
Unsold inventory is at a 3.2-month supply mdash; the lowest level since NAR began tracking in 1999.
NAR chief economist Lawrence Yun says a healthy economy and robust job growth drove buyer demand in 2017, but high home prices and strapped inventory kept home sales from reaching its highest potential.
ldquo;Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,rdquo; said Yun in a press release.
ldquo;At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.rdquo;
ldquo;Closings scaled back in most areas last month for this same reason,rdquo; he added. ldquo;Affordability pressures persisted, and the pool of interested buyers at the end of the year significantly outweighed what was available for sale.rdquo;
Keller Williams chief economistnbsp;Ruben Gonzalez echoed Yunrsquo;s sentiments and said 2018 is shaping up to be a strong year for home sales, despite continued inventory issues.
ldquo;The current strength of the employment situation and consistent economic growth leads us to believe that the fundamentals driving demand for homes in 2018 will remain strong,rdquo; Gonzalez said in an emailed statement. ldquo;Low inventory remains an issue for existing homes and may constrain sales if it persists throughout the year.rdquo;
ldquo;Overall, we look forward to 2018 being another strong year for home sales, likely similar in magnitude to the previous two years,rdquo; he finished.
Distressed sales, which include foreclosures and short sales, were at 5 percent mdash; a 1 percentage point increase from last month and down 2 percentage points from a year ago. Four percent of December sales were foreclosures, and 1 percent were short sales.
Single-family home sales were at a SAAR of 4.96 million mdash; a 2.6 percentage point month-over-month decrease, but 1.0 percent above a year ago. The sales price for single-family homes increased by 5.8 percentage points to $248,100.
Existing condominium and co-op sales decreased 11.6 percentage points to a SAAR of 610,000 units, 1.7 percentage points above a year ago. The median existing condo price in December was $236,500 mdash; up 6.4 percentage points from 2016.
How did buying patterns vary across the country?
Herersquo;s the regional breakdown, straight from NAR:
ldquo;December existing-home sales in the Northeast fell 7.5 percent to an annual rate of 740,000, and are now 2.6 percent below a year ago. The median price in the Northeast was $261,400, which is 3.0 percent above December 2016.
In the Midwest, existing-home sales dipped 6.3 percent to an annual rate of 1.33 million in December, but are still 1.5 percent above a year ago. The median price in the Midwest was $191,400, up 7.8 percent from a year ago.
Existing-home sales in the South decreased 1.7 percent to an annual rate of 2.30 million in December, but are still 3.1 percent higher than a year ago. The median price in the South was $221,200, up 5.8 percent from a year ago.
Existing-home sales in the West declined 1.6 percent to an annual rate of 1.20 million in December, and are now 0.8 percent below a year ago. The median price in the West was $367,400, up 7.3 percent from December 2016.rdquo;
NARrsquo;s existing-home sales are based on transaction closings from MLSs and include single-family homes, townhomes, condominiums and co-ops. Seasonally adjusted annual rates are used in reporting monthly data to help accommodate for seasonal variation; the annual rate for any given month represents what the total number of actual sales for a year would be if the pace for that month were maintained for a whole year.
BYMARIAN MCPHERSONnbsp;Staff Writerhttps://www.inman.com/2018/01/24/2017-existing-home-sales-were-the-strongest-in-11-years/
Article image credited to Ricardo Gomez Angel / Unsplash
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