Investors remain active in the existing home sales residential market. About 19 percent of REALTOR® respondents reported a sale to an investor in November 2013. The share of investors has generally stayed at about this level since 2008. Cash sales account for about 70 percent of purchases made by investors, who are frequently mentioned as winning in bidding against first time buyers, who generally need to obtain a mortgage.
- NAR released a summary of existing home sales data showing that overall existing home sales fell by 4.3 percent from October to November 2013, and are 1.2% percent lower than November 2012. This was the third straight month of declines; all regions observed a decrease in sales from October.
- The national median existing-home price for all housing types was $196,300 in November, up 9.4 percent from November 2012. All regions showed growth in prices, but the Midwest and South regions are showing the most deceleration in price growth.
- November’s inventory figures fell slightly from October, but are up 5.0% from a year ago. Months’ supply is up slightly in all regions, but the West is dealing with the most pressure on inventory.
- Though sales were down again this month, there is still a projection of sales above 5 million, which would be the strongest sales figure since 2007.
- See the full NAR Existing Home Sales press release here and data tables here.
- Find a full graphical summary of the data here.
About 87 percent of REALTORS® who responded to NAR’s monthly survey reported constant or rising prices compared to prices a year ago for a typical transaction. However, prices are increasing at a more subdued pace. Approximately 12 percent of reported sales in November were of properties that sold at a net premium compared to the original listing price, compared to 20 percent in mid-2013. See the November REALTORS® Confidence Index Survey report at http://www.realtor.org/reports/realtors-confidence-index.
Confidence about current market conditions was essentially unchanged from October to November. The index for single family sales registered at 59 (58 in October) . The indexes for townhouses/duplexes was at 42 while the index for condominiums stayed at 38. An index of 50 marks “moderate” conditions . See the November REALTORS® Confidence Index Survey at http://www.realtor.org/reports/realtors-confidence-index.
However, REALTORS® appear to be more confident about the outlook for the next 6 months, but this appears to be tied to the seasonal upswing in the spring. The 6-month outlook index for single family rose to 64 (60 in October). The index for townhouses surged to 56 (45 in October ) and the index for condominiums increased to 43 (40 in October).
 An index of 50 delineates “moderate” conditions and indicates a balance of respondents having “weak”(index=0) and “strong” (index=100) expectations. The index is not adjusted for seasonality effects.
With the end of 2013 closing in, it is time to take stock of the impact from the strong 2013 housing market. Home price growth was robust in 2013 compared to 2012 and is currently forecast by NAR Research to finish the year 11.3% stronger. This improvement is important for the market as it has created equity for homeowners, boosted buyer confidence, and pulled many underwater homeowners into positive equity positions.
A borrower who purchased a median priced home in 2004 and held it for nine years, the current median tenure of a homeowner according to NAR’s annual Profile of HomeBuyers and Sellers, would have $28,114 in equity from the combined benefit of price appreciation and paying down the mortgage principle. A borrower who bought a median price home in 2012 would have more than $23,000 in equity.
It is important to note that borrowers who purchased in 2006 and 2007 at the peak of the market and thus those who experienced the sharpest price declines are now nearly in positive equity. A person who purchased in 2006 and owned through 2012 (not pictured) would have been underwater by roughly $28,200, but by 2013 this gap was down to $4,700. Continued price growth in 2014 will help to further ameliorate this gap. Homeowners who purchased since 2007 are in positive equity.
Even through the visitudes of the great recession, for most homeowners housing remains an effective vehicle for building equity and wealth.
 With a 10% downpayment at the prevailing average 30-year fixed mortgage rate