Existing home sales rocketed off the pad in March 2015, increasing 10.4 percent from March 2014 and up sequentially 6.1 percent from February 2015 as reported by the National Association of Realtors® (NAR). March sales reached a seasonally adjusted annualized rate (SAAR) of 5.19 million dwellings – the best posted number since September 2013. The March increase was the largest seen since December 2010 according to NAR.
Median prices likewise popped, increase 7.8 percent from a year ago to $210,100. Median prices have now increased year-over-year 37 consecutive months.
The following graph shows the base sales numbers — not seasonally adjusted — for 2014 and the first three months of 2015. While 2015 started out flat year-over-year, the momentum continues to build.
The next graph illustrates the continuing rise in median price on a year-over-year basis. Median price shows a definite seasonality just as does sales.
Other pertinent metrics in the NAR release included:
- All-cash transactions dipped from 26 percent of all sales in February 2015 to 24 percent in March. A year ago saw one-out-of-three sales as all-cash deals (33 percent)
- Investors purchased 14 percent of all sales and paid all-cash at 70 percent of the closings. A year ago investors tallied 17 percent of all transactions
- Distressed sales totaled one-out-of 10 transactions (10 percent) in March 2015, down from 14 percent a year ago and off 1 percent sequentially from February 2015. Foreclosures represented 7 percent of all transactions while short sales made up 3 percent
- The average foreclosure and short sale sold for 16 percent less than non-distressed properties. A year ago, foreclosures averaged an 18 percent discount and short sales 12 percent
- Four-out-of-ten March home sales (40 percent) were on the market less than one month. The median time on market for all homes sold in March was 52 days. Short sales were the longest at 165 days, foreclosures 56 days and non-distressed real estate 51 days
- First-time homebuyers were 30 percent of all transactions – unchanged from a year ago
- While the inventory rose 5.3 percent to 2.0 million listings, the increased sales rate saw the estimated months inventory at 4.9 months compared to 5.3 months a year ago and 5.0 months in February. Six-months inventory is considered normal by many economist for existing homes
NAR also discussed the return of the boomerang buyers – those formerly distressed homeowners that now are once again eligible for FHA and like mortgage loan programs. An NAR report this week concluded that 1.5 million prior owners will likely become eligible during the next five years.
To read the entire NAR press release and access data click http://www.realtor.org/news-releases/2015/04/existing-home-sales-spike-in-march
Despite new stringent loan underwriting standards, housing is making impressive gains. With an estimated 3 percent average increase in rents in 2015 (Axiometrics), households are looking at essentially locking-in their housing cost and in many circumstances building equity once again.
My forecast for the coming months? More of the same – all good news.
Ted