November 2014 existing housing sales had a tough act to follow when October posted the high-water bar for 2014 at a seasonally-adjusted annualized rate (SAAR) of 5.25 million homes, as reported by the National Association of Realtors®.
Good news is that existing homes sales in November were up 2.07 percent from the same month a year ago at a seasonally-adjusted annualized rate of 4.93 million, The sequential decline from October 2014 was a 6.09 percent decline. Historically, the October to November drop is 12.2 percent, so in reality November posted strong sales in what had been a very soft year in housing sales.
Home sales over the past several decades typically peak in June (not seasonally adjusted), and average 24.6 percent less in November compared to the peak. With an estimated 352,000 sales closing in November, sales were down 30.4 percent from the 506,000 posted in June.
The median home price in November of $205,300 was up 5.0 percent from a year earlier – the 33rd consecutive month of year-over-year price increases.
The first graph shows the SAAR rate of sales for 2013 and 2014 by month. Note that this now makes two-consecutive months that home sales were up year-over-year and the only two months this has occurred in 2014.
The limited inventory of homes for sale (now at a 5.1 month inventory with normal considered 6.0 months) once again saw prices rise, up 5.0 percent, a result of demand outstripping supply. The following graph shows the monthly median prices for 2013 and 2014, not seasonally adjusted.
The November sales, when viewed without any seasonality adjustments, were down slightly year-over-year with an estimated 352,000 sales in November 2014 compared to 362,000 a year ago (down 2.76 percent). From a business perspective, November 2014 had 18 business days while November 2013 had 19 business days. Hence closed transactions per day were up in November 2014 at an average 19,556 closings versus 19,053 in November 2013.
Other details from the NAR November home sales release included:
- Investors for the second month in a row accounted for 15 percent of all house closings compared to 19 percent a year ago
- 61 percent of investors paid all-cash for their acquisitions in November
- All-cash transactions made up one-out-of-four (25 percent) of all closing in November versus 32 percent a year ago and 27 percent in October 2014. Historically all-cash transactions run in the 12 to 14 percent range
- First-time homebuyers, which under normal times years ago made up 40 percent of all buyers, increased from 29 percent in October to 31 percent in November
- Distressed sales again made up one of every 11 closings (9 percent) with short sales 3 percent and foreclosures 6 percent. A year ago distressed properties tallied 14 percent of all closings
- Foreclosures sold at an average discount of 17 percent when compared to non-distressed real estate while short sales were discounted 13 percent
- The typical property sold in November was on the market 65 days compared to 63 days in October 2014 and just 56 days in November 2013. 32 percent of all homes sold in November were on the market for less than one month, with short sales taking the longest (116 days median), foreclosures at 65 days and non-distressed real estate 63 days
To read the entire NAR press release click http://www.realtor.org/news-releases/2014/12/existing-home-sales-lose-momentum-in-november-as-inventory-slightly-tightens
All factors considered, housing sales are still looking promising heading into 2015 after the weather-delayed start of 2014.
Ted