Existing-Home Sales Inch Up; Inventory at Lowest Level Since 1999

Existing-home sales rose 0.4 percent in January to 4.92 million after December sales were revised downward, the ""National Association of Realtors"":http://www.realtor.org/news-releases/2012/10/january-existing-home-sales-hold-with-steady-price-gains-seller-s-market-developing (NAR) reported Thursday. Economists had expected the sales pace to drop to 4.9 million from December's originally reported 4.94 million.

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The median price of an existing single-family home fell to $173,600 in January, the lowest level since last March.

The inventory of existing homes for sale fell 4.9 percent to 1.74 million, the lowest level since December 1999. At the reported sales pace, that represents a 4.2 month supply of homes for sale, the lowest supply since April 2005. The inventory of homes for sale is off 25.3 percent from a year ago and has fallen for five straight months.

Weak prices could be contributing to the reluctance of homeowners to list their homes. Though up 12.3 percent from a year ago, the median price of an existing single-family home has fallen for five of the last six months and is down 24.6 percent from the July 2006 peak of $230,300. The median price is also off 8.1 percent from the 2012 peak of $188,800 in June.

According to the NAR data, January existing-home sales (closed transactions) were up 9.1 percent from one year earlier, the smallest year-over-year increase since last June.

The report on existing-home sales tracked NAR’s Pending Home Sales Index, which rose in November to its highest level since April 2010 but fell sharply in December.

Distressed homes--foreclosures and short sales--accounted for 23 percent of January sales, the NAR said, down from 24 percent in December and 35 percent in January 2012. Fourteen percent of January sales were foreclosures, and 9 percent were short sales.

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Foreclosures sold for an average discount of 20 percent below market value in January (from 17 percent below market value in December), while short sales were discounted 12 percent (from 16 percent previously).

Unlike the government report on new home sales, which tracks contracts, the NAR report is based on closings, which means this report, though labeled “January,” actually reflects economic conditions when contracts were signed in November.

The median time on market for all homes, the NAR said, was 71 days in January, down from 73 days in December and 28.3 percent below 99 days in January 2012. Short sales were on the market for a median of 94 days, down from 117 days in December, while foreclosures typically sold in 47 days compared with 45 days in December. Non-distressed homes took 75 days, up from 74 days in December. As in December, 31 percent of all homes sold in January were on the market for less than a month.

First-time buyers accounted for 30 percent of purchases in January, the NAR reported, unchanged from December; they were 33 percent in January 2012.

All-cash sales were at 28 percent of transactions in January, down from 29 percent in December and 31 percent in January 2012, NAR said. Investors--who account for most cash sales--purchased 19 percent of homes in January, down from 21 percent in December and 23 percent in January 2012.

Existing-home sales in the Northeast increased 4.8 percent to an annual rate of 650,000 in January and were 12.1 percent above January 2012. The median price in the Northeast was $230,500, up 2.4 percent from a year ago.

Existing-home sales in the Midwest rose 3.6 percent in January to a pace of 1.16 million and were 17.2 percent higher than a year ago. The median price in the Midwest was $131,800, the lowest level since last March but 8.6 percent above January 2012.

In the South, existing-home sales increased 1.0 percent to an annual level of 1.96 million in January and were 14.0 percent above January 2012. The median price in the South was $152,100, up 13.4 percent from a year ago.

Existing-home sales in the West fell 5.7 percent to a pace of 1.15 million in January and were 5.7 percent below a year ago. The median price in the West was $239,800, the lowest level since June but 26.6 percent above January 2012.

_Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 a.m. and again at 9:40 a.m. EST._