- Last week NAR released a summary of existing home sales data showing that existing home sales will start the 2014 year off with the slowest pace in 18 months. January showed a decrease in sales of 5.1% from last month as well as from a year ago.
- The national median existing-home price for all housing types was $188,900 in January, up 10.7% percent from January 2013.
- All regions showed growth in prices, but the West had the biggest gain at 14.6% from one year ago. The Northeast had the smallest price again at 6.6% from a year ago.
- January’s inventory figures increased by 7.3% from a year ago and it will take 4.9 months to move the current level of inventory. Housing starts will need to bounce back to help strengthen inventory levels.
- With sales down this month, that makes five of the last six months with decreased sales. With prices continuing to increase, the condo market appears to be thriving more than single family homes. There will be a lot of attention directed to changes in mortgage rules going forward to see if there is a change in loan applications. See the full NAR Existing Home Sales press release here and data tables here.
- Find a full graphical summary of the data here.
Taking a closer look at Existing Home Sales price data reveals an interesting trend going on in the market…
- As shown in the chart below, while sales in the lower home-price tiers are falling, sales at the upper end are rising, quite swiftly at the highest end.
- One impact of the fact that home sales are rising at the high end but falling at the low end is that the mix of homes may be changing. In addition to fewer distressed properties, homes selling now may have more bedrooms, square footage, and other valuable amenities than homes that were sold last year.
- This shift in the mix of homes selling has the effect of pushing up the price of the median home sold, which is simply the price of the home where 50 percent of all homes sold were priced above and 50 percent were priced below that sales price.
- In spite of this drawback in the median home sales price, it has advantages of being able to be produced quickly and being a remarkably good leading indicator for other price measures that are less susceptible to the mix of homes issue.
Whither the Weather
The weather is getting a lot of attention for driving the pending results in December. But how do we know that the weather was responsible for the slip in contract signings as opposed to other market forces? Is there a way to measure the weather and its impact on the home purchase process? The answer is yes, there are tools to help measure weather’s impact. In this article we’ll look at how weather can impede the home buying process, measures of the weather in recent months, and look ahead to how meaningful December’s data are for determining the future housing market trends. While the December pending home sales figures signal notably weaker home sales figures in January and February, the next few months of data will be better indicators of the 2014 housing market.
The weather is getting a lot of attention for driving the pending results in December. As an agent, you know how snow can keep you and buyers from home showings, but how do we know that the weather was responsible for the slip in contract signings as opposed to other market forces and what does it mean for sales in the months ahead? While the December pending home sales figures signal notably weaker home sales figures in January and February, the next few months of data will be better indicators of the 2014 housing market.
- NAR released a summary of existing home sales data showing that overall existing home sales for 2013 reached a 7 year high of 5.09 million. December showed a slight decrease of 0.6% from a year ago. Existing home sales increased by 1.0% from November 2013 to December 2013.
- The national median existing-home price for all housing types was $198,000 in December, up 9.9 percent from December 2012. Annual price for an existing home in 2013 was $197,100, up 11.5% which was the best price increase in the last 8 years.
- All regions showed growth in prices, but the West had the biggest gain at 16%. The Northeast had the smallest price again at 3.6%.
- December’s inventory figures dropped 9.3% from November, but up 1.6% from a year ago. Prices will continue to increase if there is no considerable increase in inventory. A boost in housing starts should also help to stabilize price growth.
- With sales up this month, the year concluded on a high note giving the housing market a strong year of home sales. We can still expect mortgage rates to rise as well as home prices for this new year. With the changes in mortgage rules, there is still a positive outlook for a healthy housing market for 2014. See the full NAR Existing Home Sales press release here and data tables here.
- Find a full graphical summary of the data here.
Latest EHS data, as an infographic: