By Peter Ricci
Existing-home sales increased 12.8 percent year-over-year in December as the housing market closed out a stellar 2012, according to the latest numbers from the National Association of Realtors.
Though sales did dip a bit from November to December, falling 1.0 percent, total home sales in 2012 came out to 4.65 million. That’s a 9.2 percent increase from 2011 (the strongest annual increase since 2004) and the highest volume of sales since 2007.
Existing-Home Sales – A Recovering Market
Other details in NAR’s report further spotlighted that the housing market of 2012 was a market in recovery:
- Housing inventory remained tight in December, falling 8.5 percent from November to a 4.4-month supply; that’s the lowest housing supply since May of 2005, and is 21.6 percent below December 2011.
- With housing inventory low and existing-home sales remaining high, though, median existing-home price continues to increase; in December, median price for existing homes was 11.5 percent higher than a year ago, marking the 10th straight month of year-over-year price gains.
- For all of 2012, NAR estimates that median existing-home price increased 6.3 percent over 2011, the strongest annual price gain since 2005.
- Median time on market in December was 73 days, down from 99 days a year ago; 31 percent of all homes sold in December were on the market for less than a month.
- There was also good news on the distressed home front. Distressed property sales made up 24 percent of existing-home sales in December, down from 32 percent a year ago; also, the discounts for distressed properties are decreasing, with foreclosures and short sales selling with average discounts of 17 and 16 percent, respectively.
- And finally, regional existing-home sales were also positive, increasing 15.5 percent year-over-year in the Midwest and 14.7 percent in the South; median price for the regions also increased by respective amounts of 12.3 and 11.0 percent.
Pent-up Demand to Drive Housing Market in 2013?
Lawrence Yun, NAR’s chief economist, said pent-up demand should accumulate through 2013.
“Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” he said. “The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices. Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013.”