How are sales and who’s buying?

Existing home sales, which are completed transactions for all types of housing, increased 0.8% to a seasonally adjusted annual rate of nearly five million in February from January and are 10.2% more than the level of homes seen in February 2012.

The level of February sales was the highest since the tax credit period of November 2009 according to the National Association of Realtors (NAR). Home prices for 12 straight months had year-over-year price increases. According to NAR’s chief economist Lawrence Yun, “Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise.”

But even with that good news, the figures show that the limited housing inventory and restrictive lending requirements remain challenges for home ownership.

At the end of February, home inventory increased 9.6%, representing a 4.7-month supply at the current sales rate. This is up from the 4.3 months of home inventory in January, which was the lowest supply since May 2005. Listed inventory is 19.2% below last year, in which there was a 6.4-month supply.

The national median price for existing homes (all types) increased 11.6% in February from the previous month. There hasn’t been a 12-month consecutive year-over-year increase since the peak of the real estate market, which was June 2005 to May 2006. The February median price increase is the strongest since November 2005, when it was 12.9% above a year earlier.

Foreclosures and short sales comprised 25% of February sales, which is an increase of 2% when compared to January, but a significant decrease from the 34% reported for February 2012. Of these distressed sales, 15% were foreclosures and 10% were short sales. What is interesting about all of this is that foreclosures sold for an average discount of 18% below market value in February while short sales sold at a 15% discount.

The national median time on the market for homes was 74 days in February as compared to 97 days in February 2012. The median time for foreclosures being on the market was 52 days, 101 days for short sales and 77 days for other homes. Approximately a third of the homes sold in February were on the market for less than a month.

First-time buyers comprised about a third of February sales, which was about the same in January and slightly less than February 2012. Cash sales accounted for 32% of home sales in February, which is an increase of 4% compared to January and slightly less than February sales in 2012. Typically, investors with cash make offers during the holidays when other buyers tend to take a break.

Regionally, in February existing home sales in the Northeast decreased 3.1% while the median price increased 7.6% when compared to February 2012. In the Midwest, existing home sales decreased 1.7% and the median price increased 7.7%. In the South, existing home sales increased 2.6% and the median price increased 9.3%. And in the West, existing home sales increased 2.6% and the median price increased 22.7%.

In Connecticut home sales increased 6.8% and the median price increased 1.3%. The supply of available homes decreased 27%. Reportedly, Greenwich sales increased 12.5% in February.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected] or she may be reached directly at 203-249-2244. 

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