Existing Home Sales
If you are a homeowner thinking about waiting until next year or spring to put your home on the market that might not be the best option. Don’t wait…price your home to sell and sell now if you want to maximize your profits AS TO today’s market value. Even though these types of properties are higher in other parts of the country they are still a concern locally in Richmond, Tri-Cities and Chesterfield County VA areas. Anytime a property closes as a short sale or foreclosure it is selling, on average, below the current market value rate.
From USA Today-Foreclosure sales are moving so slowly in half the states that at the current pace, it will take more than eight years on average to clear the 2.1 million homes in foreclosure or with seriously delinquent mortgages, new research shows.
That’s about twice as long as a year ago in the states where foreclosures go through courts — before the mortgage industry was upended by last fall’s disclosures that court papers in many foreclosure cases were improperly prepared. Since then, new checks have slowed the process. Read more…
Home resales rose another 2.7 percent last month, according to the National Association of REALTORS® monthly Existing Home Sales report.
An “existing home” is a home that’s been previously occupied and is not considered new construction.
The number of existing homes sold on a rolling 12-month basis is now at its highest point since May 2010, the month before the federal homebuyer tax credit ended. It’s also up some 40% since July 2010, the month after the tax credit ended.
But that’s not the biggest story in the Existing Home Sales report. The precipitous decline in home inventory deserves more attention.
At the current pace of sales, the complete, national home resale inventory will be sold in 7.6 months. This is close to 5 months faster as compared to last year’s peak, and well below the 2-year home supply average of 9.0 months. There more buyers in the market, it seems, and fewer homes from which they can choose.
Total home resale inventory is down to just 3.38 million homes nationwide — the fewest in 12 months.
There were other interesting statistics in the official Existing Home Sales report, including a break-down of purchases by buyer-type.
- First-time buyers accounted for 29% of purchases, down from 33% in January
- Repeat homebuyers accounted for 48% of purchases, up from 47% in January
- Investors accounted for 23% of of purchases, up from 20% in January
In addition, distressed sales — foreclosures and short sales — made up 37 percent of the market.
Over the next few days, more housing data will hit the wires and it’s expected to show similar strength to January’s Existing Home Sales report. With falling supplies and a growing base of move-up buyers, home prices in Chester and around the country are expected to rise in the coming months ahead.
Existing Home Sales surged 12 percent last month, closing 2010′s housing market with strength. An “existing home” is a home that cannot be categorized as new construction; a resale.
According to the National Association of REALTORS®, seasonally-adjusted, annualized Existing Home Sales figures climbed by more than a half-million units in December as compared to November. It’s the 3rd straight month of home resale improvement nationwide.
Sales volume is now as high as it’s been since May 2010 — just after the federal home buyer tax credit’s expiration.
In addition, the number of months needed to sell the complete, current home inventory at the current pace of sales fell by 1.4 months, tying December for the biggest one-month home supply improvement in 2 years.
It’s yet another signal that the housing market is in recovery. Not that this data should surprise anyone. November’s Pending Home Sales report told us to expect it two weeks ago.
Broken down by buyer-type, home sales split as follows:
- First-time home buyers : 33% of all sales
- Repeat buyers : 47% of all sales
- Real estate investors : 20% of all sales
Cash buyers represented 29 percent of all transaction, down 2 ticks from November. This may suggest that mortgage guidelines are loosening — another sign of economic improvement.
So, take note, Chesterfield home buyers. This spring, along with mortgage rates, home values should rise, too. Expect less “bang for your buck” as the housing recovery takes hold here in Rivers Bend and across the nation.
The best deals of the year may be the ones made this month.
Existing Home Sales jumped another 6 percent in November, the report’s third month of improvement since bottoming in July.
According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October. An “existing home” is a home that cannot be considered new construction.
Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months.
November’s strong housing data is yet another signal to buyers in Fort Lee that the housing market’s foundation has been rebuilt, and that a rebound is imminent. It’s helped that there are great “deals” on which for buyers to pounce.
In November, short sales and foreclosures accounted for one-third of all existing homes sold, and carried an average price discount of 10 percent and 15 percent, respectively, as compared to non-distressed sales.
Repeat buyers continue to power the market, too, representing more than half of all home buyers.
- First-time buyers : 32% of all buyers
- Investors : 19% of all buyers
- Repeat buyers : 51% of all buyers
This breakdown suggests that housing has regained its footing. First-time buyers can’t support a market long-term like repeat buyers can and, as compared to 12 months ago, the percentage of repeat buyers is now up 14 points.
Home buyers take note. Raw sales volume is rising and available inventory is dropping. Basic supply-and-demand tells us that this will lead home prices higher. Furthermore, mortgage rates are rising quickly, increasing the cost of homeownership.
If buying a home is a part of your plan for 2011, consider accelerating your purchase time frame. Existing homes account for more than 80% of homes sold nationwide. If the market keeps improving like this, your home affordability will worsen.
After two months of surging sales, home resales fell by 100,000 units last month to 4.4 million homes nationwide.
October’s Existing Home Sales tally is slightly below the report’s 6-month rolling average, according to the National Association of REALTORS® — a time span which includes this year’s $8,000 federal home buyer tax credit’s tail end.
Housing statistics have been wildly inconsistent during that period.
For the future of Chesterfield housing markets, though, it’s encouraging that first-time and investment property buyers were both outnumbered by “move-up” buyers; buyers that have sold their respective homes in favor of larger ones. It’s the move-up buyers that power housing.
In October, buyer profiles broke down as follows:
- First-time buyers : 32 percent of all buyers, unchanged from September
- Repeat home buyers : 49 percent of all buyers, down one tick from September
- Investors : 19 percent of all buyers, up one tick from September
As a point of comparison, first-timers represented 50 percent of all purchases in October 2009.
For Rivers Bend home buyers, October’s Existing Home Sales report is neither weak nor strong. It signals that, with mortgage rates low and home affordability high, housing may be reaching some form of balance. Because — although home sales are down — home supplies are down, too.
We can infer that buyers outnumber sellers, but probably not by much. In most areas, negotiation leverage is still up for grabs.
At the current pace of sales, the complete housing stock would be depleted in 10.6 months.
The news is not as bad as it might appear at face value. I knew this would happen because when the numbers come out they are compared with the same month of last year. Last year, August through October, we had an anomaly with the tax incentive program in play. Something which we do not have this year. The numbers for our area (CVRMLS) for September 2010.
Pending Sales & Sales Success
In this market segment, Pending Sales for September are down by 13.72% to 1,038 versus September of last year at 1,203 that went under contract. With 2,808 newly listed homes this month and 1,038 under contract, the sales success index of 36.97% for September decreased 5.70% versus last year’s index of 39.20% in 2009.
According to the September 2010 statistics, this market area has experienced some downward momentum with the decline of average prices at closing. Prices dipped 1.29% to $211,307 versus the previous year September at $214,066. This is a difference in price of $2,758.
New Listings & Months Supply of Inventory
New Listing in this area for the month of September yielded 2,808 available resale dwellings. This was a decline of 8.50% or 261 units in comparison to September 2009. The total housing inventory at the end of September dipped by 0.60% to 13,783 existing homes available for sale. At an average of 1,075 closed sales per month over the last 12 months (October 2009 – September 2010), represented an unsold inventory index of 12.83 MSI for this market segment.
Sales of existing homes in recovered in August, perhaps the result of a post-tax credit normalization.
As compared to July, Existing Home Sales rose 8 percent in August, buoyed by falling interest rates and slow-to-rise home prices. There’s lot of “good deals” out there and home buyers in Chesterfield are taking advantage.
The housing gains are relative, however. August’s total units sold barely crossed 4 million and still trails the average figures of the last few years by close to 1 million units.
Despite that, the August Existing Home Sales report can be considered a strong one. This is for several reasons:
- Sales volume increased in August without tax credit or government intervention
- Sales growth is not limited by geography. All 4 regions — Northeast, Southeast, Midwest, and West — showed improvement last month.
- Repeat buyers are driving the market, representing 48 percent of sales, up from forty-three percent in July.
And, perhaps most important to the housing market market, the number of available home resales dropped by almost one full month last month. At the current sales pace, the national inventory would be depleted in 11.6 months.
For home buyers, the data presents an interesting opportunity. With average mortgage rates rising from their best levels ever and home affordability cresting in places like The Highlands , this autumn may represent the turn-around point for the housing market nationwide.
If you’re planning to move in early-2011, consider moving up your time frame.
The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®’ Existing Home Sales report.
It’s a drop of 27 percent from June; single-family home resales are at the report’s lowest levels since May 1999.
Furthermore, because of the sharp drop in sales volume, home inventories are spiking.
Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.
Home supply was just 8.9 months in June.
For home sellers in Chester , the Existing Home Sales report is a bit of bad news. Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices. It may also increase time-on-market.
For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.
It helps that home affordability is up, too.
Although there’s reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today’s rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.
Mortgage rates are down 0.75 percent since mid-April.
Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month.
An “existing home” is a home that cannot be considered new construction.
The 5 percent drop in sales from May to June was expected, but a closer look at the month’s data reveals some interesting trends.
First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That’s a healthy increase for just 4 weeks’ time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to “move up” to larger, more expensive property.
Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.
Second, June’s “distressed sales” accounted for 32 percent of all home resales, up from 31 percent in May.
A figure like this hints at the large role foreclosures continue to play in a Chesterfield home buyer’s home search strategy. And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.
Lastly, take note that home inventories are rising. June’s 8.9 months of supply is the highest in 10 months. Excess supply leads home prices lower, all things equal.
Overall, the Existing Home Sales data from June is a mixed bag. There’s support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low mortgage rates and strong negotiation leverage.