Existing housing sales started strong out of the gate in January 2016, up 11.0 percent year-over-year with median price up 8.2 percent according to the National Association of Realtors® (NAR). Sales hit 5.47 million on a seasonally adjusted annualized rate (SAAR), the most since July 2015. On an unadjusted basis, 302,000 homes closed in January 2016 compared to 281,000 in January 2015, a gain of 7.47 percent.
The following graph shows both existing home sales and median prices since 2009. After missing expectations in November due to the newly implemented TRID rules, sales are now back on the trajectory experienced in the past two years.
Home prices again remained strong, and thus far are exceeding the 3.5 to 5.0 percent price gain anticipated in 2016. Bolstering this increase is less-than normal inventory at 4.5 months. Economist peg six months as normal in the number of inventory for existing homes, continuing the tight market with limited inventory seen in the past three years.
Other details in the NAR released included:
- Median prices have now gone up 47 consecutive months on a year-over-year basis, now at $213,800
- First-time buyers totaled 32 percent of January transactions, still far short of the 40 percent considered normal in the past decade
- All cash-sales were completed in one-out-of-four transactions (26 percent), up from 24 percent in January. Historically, all-cash closing made up from 12 to 14 percent of all sales
- Investors bought 17 percent of all January closings, up from 15 percent in December. Two-out-of-every-three January sales to investors were all-cash (67 percent)
- Short sales and foreclosures made up one out of every 11 sales in January (9 percent), up from 8 percent in December, but down from 11 percent a year ago. Two out of every 100 sales were short sales and seven out of every 100 were foreclosures. Short sales sold for an average 12 percent less than non-distressed properties and foreclosures at an average 13 percent discount
- One-out-of-every three January sales (32 percent) were on the market less than one month. Short sales took the longest at a median 77 days, foreclosures 57 days and non-distressed properties 61 days
To read the full NAR press release and to access several data series click http://www.realtor.org/news-releases/2016/02/existing-home-sales-inch-forward-in-january-price-growth-accelerates
A potential issue in coming months is a very tight inventory, which will continue upward pressure on prices.
If the January trends hold, housing is looking very attractive in 2016.
Ted