NAR Cites Tight Supply For Sharp Decline In Existing Home Sales
Existing-home sales declined 5.4 percent on a seasonally adjusted annual basis to 4.37 million from an upwardly-revised 4.62 million in May. Economists surveyed by Reuters expected a gain of +1.1 percent. According to the National Association ofrnRealtors® (NAR), lower sales of existing homes in June were not the result ofrnlagging demand but rather of an insufficient supply. </p
Sales of existing single-family homesrndeclined 5.1 percent to a seasonally adjusted annual rate of 3.90 million from 4.11rnmillion in May, an increase of 4.8 percent from a year earlier when the annual raternwas 3.72 million. Condominium and co-oprnsales were down 7.8 percent to 470,000 from 510,000 in May but up 2.2 percentrnfrom the 460,000 level in June 2011.</p
On a non-seasonally adjusted basis,</bsales in June were higher than in May; 462,000 compared to 448,000, and singlernfamily home sales were up to 415,000 from 399,000. One year earlier total and single-familyrnsales were 440,000 and 395,000 respectively.</p
Lawrence Yun, NAR chief economist,rnsaid the bigger story is lower inventory and the recovery in home prices. rn”Despite the frictions related to obtaining mortgages, buyer interest remainsrnsolid. But inventory continues to shrink and that is limiting buyingrnopportunities. This, in turn, is pushing up home prices in many markets,”rnhe said. “The price improvement also results from fewer distressed homesrnin the sales mix.”</p
Thernnational median existing-home price for all housing types was $189,400 in June,rnup 7.9 percent from a year ago. This is the fourth consecutive month whenrnmedian prices have been higher than they were at the same point in 2011. The Junernincrease was the strongest since February 2006 when the median price rose 8.7rnpercent from a year prior. The averagernprice was $238,800 compared to $226,000 in June 2011.</p
Thernmedian existing single-family home price was $190,100 an increase of 8.0rnpercent year-over-year and the median existingrncondo price was up 6.9 percent on an annual basis to $183,200. </p
Distressed homes accounted for 25rnpercent of sales in June with 13 percent of all sales being foreclosures and 12rnpercent short sales. These figures were unchangedrnfrom May but down from 30 percent in June 2011. Foreclosures sold for anrnaverage discount of 18 percent below market value in June, while short salesrnwere discounted 15 percent. </p
NAR President Moe Veissi noted a steady growthrnin buyer interest. “Buyer traffic has virtuallyrndoubled from last fall, while seller traffic has risen only modestly,” hernsaid. “The very favorable market conditions are helping to unleash a pent-uprndemand, which is why housing supplies have tightened and are supporting growthrnin home prices. Nonetheless, incorrectly priced homes will not attractrnbuyers.”</p
Total housing inventory at the endrnJune fell another 3.2 percent to 2.39 million existing homes available forrnsale, which represents a 6.6-month supply4 at the current salesrnpace, up from a 6.4-month supply in May. Listed inventory is 24.4 percentrnbelow a year ago when there was a 9.1-month supply.</p
First-time buyers accounted for 32rnpercent of purchasers in June, compared with 34 percent in May and 31 percentrnin June 2011 which Yun says indicates that a tight inventory in lower pricesrnranges and unnecessarily tight credit standards are holding back entry levelrnactivity. “A healthy market share of first-time buyers would be about 40rnpercent,” he said. </p
All-cash sales edged up to 29rnpercent of transactions in June from 28 percent in May; they were 29 percent inrnJune 2011. Investors, who account for the bulk of cash sales, purchasedrn19 percent of homes in June, up from 17 percent in May; they were 19 percent inrnJune 2011.</p
Regionally,rnexisting-home sales in the Northeast dropped 11.5 percent to an annual pace ofrn540,000 in June but are 1.9 percent above June 2011. rnThe median price in the Northeast was $253,700, down 1.8 percent from a yearrnago.</p
Existing-homernsales in the Midwest slipped 1.9 percent in June to a level of 1.02 million butrnare 14.6 percent higher than a year ago. The median price in the Midwestrnwas $157,600, up 8.4 percent from June 2011.</p
In the South,rnexisting-home sales declined 4.4 percent to an annual pace of 1.73 million inrnJune but are 5.5 percent above June 2011. The median price in the South wasrn$165,000, up 6.6 percent from a year ago.</p
Existing-homernsales in the West fell 6.9 percent to an annual level of 1.08 million in Junernand are 3.6 percent below a year ago. The median price in the West wasrn$233,300, up 13.3 percent from May 2011. Given tight supply in both thernlow and middle price ranges in this region, sales in the West are stronger inrnthe higher price ranges.
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