The report, which covers 52 metro markets, shows a broad recovery all across the country, with both sales and prices rising almost every month in 2012.
While home sales in December dropped 4.9 percent month-over-month (following the standard holiday pattern), RE/MAX’s data shows a 3.8 percent year-over-year increase. This marks the 18th straight month in which sales improved on a yearly basis.
Of the 52 markets tracked for the report, 34 posted higher sales than in December 2011, and 16 of those markets saw double-digit gains.
Prices gave an even stronger performance as 2012 came to a close. According to RE/MAX, the median price for homes sold in December was $166,250, 1.8 percent up from November and 7.6 percent up from December 2011. December was the 11th consecutive month to see year-over-year price improvement.
Forty-eight of the 52 tracked markets experienced yearly price gains, and 21 posted double-digit increases, according to the report.
RE/MAX attributes 2012’s housing turnaround to a combination of record low interest rates, affordable prices, and a shrinking inventory, which together “created opportunities that many consumers could not resist.”
“We can finally say that the worst of the housing crisis is now behind us, as 2012 saw dramatic increases in both sales and prices, with home buyers and sellers coming back to the market in numbers we’ve been anticipating for years,” said RE/MAXCEO Margaret Kelly. “The market started 2012 with a great surge, and we’re hoping that 2013 will be even stronger. We’re not completely out of the woods, but we’re well on the way to a solid and sustainable recovery.”
The biggest issue leftover from 2012 is inventory, which in December saw its 30th straight monthly decline. RE/MAX’s report shows the total number of homes for sale in December was down 11.8 percent from November and 29.1 percent from December 2011.
While the shrinking inventory has likely played a role in the ongoing trend of price increases, it has also created difficulties for potential buyers. RE/MAX recorded a 5.7 month supply in December, meaning it would take 5.7 months for all homes on the market to sell at the current monthly sales volume (a balanced supply between buyers and sellers is six months). However, many markets—particularly those in the hardest-hit states—are still reporting months supply levels in the one-, two-, and three-month range.
Low supply also impacted RE/MAX’s measure of days on market for homes sold, which slipped to 84 in December. That figure is two days more than November’s average of 82, but a significant 12 days lower than 98 in December 2011. According to RE/MAX, the average measure for days on market throughout 2012 was 89.
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