NAR: Existing-Home Sales Jump to 3-Year High in November
By: Mark Lieberman, Five Star Institute Economist
Existing-home sales rose 5.9 percent in November to a seasonally adjusted annual rate of 5.04 million, the highest level since November 2009, the National Association of Realtors (NAR) reported Thursday. Economist had expected the sales pace to improve to 4.9 million.
The median price of an existing single-family home rose to $180,600 in November, up 10.1 percent from November 2011. November was the ninth consecutive month to see year-over-year price gains, maintaining the longest streak for yearly improvements since mid-2006.
The month-to-month sales improvement reflected a downward revision to October’s sales pace to 4.76 million from the originally reported 4.79 million.
According to the NAR data, November existing-home sales—closed transactions—were up 14.5 percent from one year earlier. The increase in sales in November was the fourth in the last six months, following a similar pattern from 2011.
According to NAR, the number of homes for sale fell in November to 2.03 million, the lowest level since December 2001. The months’ supply of homes listed for sale dropped to 4.8 in November, the lowest since September 2005.
Distressed homes (foreclosures and short sales sold at deep discounts) accounted for 22 percent of November sales (12 percent were foreclosures, and 10 percent were short sales), down from 24 percent in October and 29 percent in November 2011, NAR said. Foreclosures sold for an average discount of 20 percent below market value in November, while short sales were discounted 16 percent. In October, foreclosures sold for an average discount of 20 percent, while short sales were discounted 14 percent.
Unlike the government report on new home sales which tracks contracts, the NAR report is based on closings, which means this report—though labeled “November”—actually reflects economic conditions in September, when contracts were signed.
The median time on market for all homes was 70 days in November, slightly below 71 days in October but 28.6 percent below 98 days in November 2011. Thirty-two percent of homes sold in November were on the market for less than a month, while 20 percent were on the market for six months or longer; these findings are unchanged from October.
First-time buyers accounted for 30 percent of purchases in November, down from 31 percent in October and 35 percent in November 2011.
All-cash sales were at 30 percent of transactions in November, up slightly from 29 percent in October and 28 percent in November 2011. Investors, who account for most cash sales, purchased 19 percent of homes in November, little changed from 20 percent in October and 19 percent in November 2011.
According to NAR, just under 44 percent of home sold were priced between $100,000 and $250,000.
Sales may have been affected by Hurricane Sandy, which tore through the Northeast at the end of October and disrupted business activity. Closings are often bunched at the end of the month, and indeed, sales increased 6.9 percent to 620,000 in the storm-struck Northeast, up almost 15 percent from November 2011.
“We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions,” NAR chief economist Lawrence Yun said.
The median price of an existing home in the Northeast was $232,900, up 1.1 percent from October but down 2.0 percent from a year ago.
Existing-home sales in the Midwest increased 7.2 percent in November to a pace of 1.19 million and were 21.4 percent higher than a year ago. The median price in the Midwest was $141,600, up 0.1 percent from October and 7.0 percent above November 2011. The sales pace in the Midwest was the strongest since September 2008.
In the South, existing-home sales rose 7.9 percent in November to an annual pace of 2.04 million, 17.2 percent above November 2011 and the fastest pace since September 2007. The median price in the South was $157,400, up 3.6 percent from October and 10.5 percent from a year ago.
Existing-home sales in the West rose 0.8 percent to 1.19 million in November, 4.4 percent higher than a year ago. The median price in the West was $248,300, up 2.1 percent month-month and up 23.9 percent since November 2011.
Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 am and again at 9:40 eastern time.
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