Existing-Home Sales Rise in May with Strong Price Increases

Existing-Home Sales Rise in May with Strong Price Increases

 Information From The National Association of Realtors^®


WASHINGTON (June 20, 2013) – Existing-home sales improved in May and remain solidly above a year ago, while the median price continued to rise by double-digit rates from a year earlier, according to the National Association of Realtors^®.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April, and is 12.9 percent above the 4.59 million-unit pace in May 2012.

Lawrence Yun, NAR chief economist, said the recovery is strengthening and to expect limited housing supplies for the balance of the year in much of the country.  “The housing numbers are overwhelmingly positive.  However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent,” he said.  “The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth.”
Existing-home sales are at the highest level since November 2009 when the market jumped to 5.44 million as buyers took advantage of tax stimulus.  Sales have stayed above year-ago levels for 23 months, while the national median price shows 15 consecutive months of year-over-year increases.
Total housing inventory at the end of May rose 3.3 percent to 2.22 million existing homes available for sale, which represents a 5.1-month supply² at the current sales pace, down from 5.2 months in April.  Listed inventory is 10.1 percent below a year ago, when there was a 6.5-month supply.
The national median existing-home price³ for all housing types was $208,000 in May, up 15.4 percent from May 2012.  This marks six straight months of double-digit increases and is the strongest price gain since October 2005, which jumped a record 16.6 percent from a year earlier.  The last time there were 15 consecutive months of year-over-year price increases was from March 2005 to May 2006.
Distressed homes⁴ – foreclosures and short sales – accounted for 18 percent of May sales, unchanged from April, but matching the lowest share since monthly tracking began in October 2008; they were 25 percent in May 2012.  Fewer distressed homes, which generally sell at a discount, account for some of the price gain.
Eleven percent of May sales were foreclosures, and 7 percent were short sales.  Foreclosures sold for an average discount of 15 percent below market value in May, while short sales were discounted 12 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.54 percent in May from 3.45 percent in April; it was 3.80 percent in May 2012.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said market conditions today are vastly different than during the housing boom.  “The boom period was marked by easy credit and overbuilding, but today we have tight mortgage credit and widespread shortages of homes for sale,” he said.
“The issue now is pent-up demand and strong growth in the number of households, with buyer traffic 29 percent above a year ago, coinciding with several years of inadequate housing construction.  These conditions are contributing to sustainable price growth,” Thomas said.
The median time on market for all homes was 41 days in May, down from 46 days in April, and is 43 percent faster than the 72 days on market in May 2012.  Short sales were on the market for a median of 79 days, while foreclosures typically sold in 43 days and non-distressed homes took 39 days.
Forty-five percent of all homes sold in May were on the market for less than a month.  The median time on the market is the shortest since monthly tracking began in May 2011; on an annual basis, a separate NAR survey of home buyers and sellers shows the shortest selling time was 4 weeks in both 2004 and 2005.

First-time buyers accounted for 28 percent of purchases in May, compared with 29 percent in April and 34 percent in May 2012.

All-cash sales were at 33 percent of transactions in May, up from 32 percent in April and 28 percent in May 2012.  Individual investors, who account for many cash sales, purchased 18 percent of homes in May; they were 19 percent in April and 17 percent in May 2012.

Single-family home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.60 million in May from 4.38 million in April, and are 12.7 percent higher than the 4.08 million-unit pace in May 2012.  The median existing single-family home price was $208,700 in May, up 15.8 percent above a year ago, the strongest increase since October 2005 when it jumped 16.9 percent from a year earlier.
Existing condominium and co-op sales slipped 1.7 percent to an annualized rate of 580,000 units in May from 590,000 in April, but are 13.7 percent above the 510,000-unit level a year ago.  The median existing condo price was $202,100 in May, which is 11.8 percent above May 2012.
Regionally, existing-home sales in the Northeast rose 1.6 percent to an annual rate of 650,000 in May and are 8.3 percent above May 2012.  The median price in the Northeast was $269,600, up 12.3 percent from a year ago.

Existing-home sales in the Midwest jumped 8.0 percent in May to a pace of 1.21 million, and are 16.3 percent higher than a year ago.  The median price in the Midwest was $159,800, up 8.2 percent from May 2012.
In the South, existing-home sales rose 4.0 percent to an annual level of 2.09 million in May and are 16.1 percent above May 2012.  The median price in the South was $183,300, which is 15.0 percent above a year ago.

Existing-home sales in the West increased 2.5 percent to a pace of 1.23 million in May and are 7.0 percent above a year ago.  With the tightest regional supply, the median price in the West was $276,400, up 19.9 percent from May 2012.

Buying or selling a home is a stressful and emotional process.

Buying or selling a home is a stressful and emotional process. Buyers feel the disappointment when they're "outbid" for a house in a multiple offer situation. Sellers feel the pain when they don't sell their house right away. After all, it's the best house in the neighborhood!

The trick is to minimize the emotional part of the process. One of the hardest things for a seller to hear, either from their agent or others, is what's wrong with their house. I always use the same example. When I walk into my vet's office with one of my dogs and he says "Your dog is fat", the first thing I say is "No he isn't!". Well, chances are he is. The vet doesn't see him every day so he notices the difference. The same thing with a seller getting their house ready for the market. The small scratch in the hardwood that's been there is no big deal, you see it every day, but to a potential buyer, they'll notice it. Any needed repairs or improvements aren't evaluations of your house or you as homeowners. They are the necessary steps needed to try and maximize the price you get for your house. Replacing a solid brass and crystal chandelier worth $5,000 with a $200 fixture from Home Depot doesn't make much sense, but that's what today's buyers want, so you do it.

If a buyer gets to the point of writing an offer, they have invested in the property emotionally. When their offer isn't accepted, the feelings of rejection and disappointment are natural. Easier said than done, but you need to move on. Things truly happen for a reason, and we can't count the number of times a disappointed buyer ends up finding the "dream home" a week later. If it wasn't meant to be, it wasn't meant to be. Stay positive, the right one is out there.

One more potential emotional powder keg is the home inspection. Sellers get annoyed because someone is "criticizing" their house and their ability to care for it. Buyers get agitated because their "dream home" isn't perfect. Remember, all houses have flaws, even brand new ones. Keep things in perspective. Ask yourself if it's really important, and proceed accordingly.

The thing to remember, for buyers and sellers, is a house is four walls and a roof, and everything in between. You make it a home. The love and laughter of a home is what gives it value, and that doesn't convey. You get to keep that forever.

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Low Inventory and Rising Prices - Good Indicators of an Active Spring Market

June 13, 2013 From GCAAR

Low Inventory and Rising Prices - Good Indicators of an Active Spring Market
Inventory remained tight and median sales prices were up in both jurisdictions, for condos and single-family homes. The condo market continued to rebound with settlements in the District and Montgomery County up
significantly over May 2012.

Washington, DC
The average number of days on market was down 20.83% from May 2012. The median price for condos was up 5.2%, and single-family homes saw a 6.6% increase in the median price. Available inventory continued to decline compared to May 2012, with 34.2% fewer condo listings and 26.7% fewer single-family listings. Condo contract and settlement activity was brisk in May, with a 32.7% increase over 2012 for contracts, and a 31.4% increase in settlements. Single-family contracts in the District increased slightly, 6.8%, and single-family settlements saw a 9.3% increase over May 2012.

Montgomery County
The average number of days on market was down 37.7% over May 2012. The median price was virtually unchanged for condos, but increased just slightly, 4.7% for single-family homes. Available inventory decreased for condos by 11.1%, and also for single-family homes, 24.5%. New condo contracts increased by 17.4% in May, and new single-family contracts rose by 10.8%. Condo settlements also showed a sizeable increase in May, 22.3%, and single-family settlements increased 5.0%

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