The supply of existing homes available for sale nationwide increased to its highest point of the year in October, with particular increases in the supply of condos and co-ops, the National Association of Realtors trade group reported today.
The estimated supply of condos and co-ops for sale increased from 5.1 months in September to 5.5 months in October, and is up 22.2 percent from the 4.5 months reported in October 2004, the association announced today.
This estimated supply gauges how long it would take to exhaust the inventory of for-sale existing homes based on the current sales rate. A market is generally considered to be in equilibrium when the supply is about six months – a market with a lesser supply is considered to be a seller’s market while a market with a greater supply is considered to be a buyer’s market.
For single-family sales, the monthly supply increased from 4.5 months in September to 4.8 months in October, and is 11.6 percent higher than the 4.3 months of inventory reported in October 2004. Total housing inventory levels at the end of October rose to 2.87 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace.
For all of 2004, the national inventory of for-sale existing homes was 4.3 months, on average. In 2003 it was 4.6 months, and in 2002 it was 4.7 months.
Sales of existing homes eased in October with a moderate decline in both single-family and condo sales, the Realtors group also reported.
Total existing-home sales – including single-family, town homes, condominiums and co-ops – were at a seasonally adjusted annual rate of 7.09 million units in October, down 2.7 percent from September’s pace of 7.29 million. Sales were 3.7 percent above the 6.84 million-unit level in October 2004.
David Lereah, NAR’s chief economist, said markets are getting into better balance between demand and supply. “We are returning to more balanced markets between home buyers and sellers, one that places buyers on a more even footing. Housing activity has peaked and is coming down a bit, and we expect further cooling in the coming months. We feel confident that housing is landing softly as rates continue to rise.”
The national median existing-home price for all housing types – including single-family, town homes, condominiums and co-ops – was $218,000 in October, rising 16.6 percent from October 2004 when the median price was $187,000. The median is a typical market price where half of the homes sold for more and half sold for less.
“The rise in inventory means that buyers will have a wider choice available to them, and the significant price appreciation over October last year shows that demand is still there, as markets continues to balance themselves,” said Thomas M. Stevens, NAR president and senior vice president of NRT Inc.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.07 percent in October, up from 5.77 percent in September; the rate was 5.72 percent in October 2004.
Single-family home sales dropped 2.5 percent to a seasonally adjusted annual rate of 6.23 million in October from 6.39 million in September, but were 3.3 percent above the 6.03 million-unit level in October 2004. The median single-family home price was $216,200 in October, up 16.6 percent from a year ago.
Existing condominium and cooperative housing sales fell 4.4 percent to a seasonally adjusted annual rate of 862,000 units from a pace of 902,000 in September. Last month’s sales activity was 6.7 percent above the 808,000-unit level in October 2004. The median condo price was $229,800, up 15.3 percent from a year ago.
Regionally, existing-home sales fell 1.2 percent in the West in October to a pace of 1.64 million, and were 3.8 percent higher than October 2004. The median price in the West was 316,000, up 16.2 percent from October 2004.
Total existing-home sales in the South declined 1.8 percent to an annual sales rate of 2.76 million units in October, and were 7 percent above October 2004. The median price in the South was $196,000, up 18.1 percent from a year ago.
Existing-home sales in the Midwest fell 1.9 percent to annual pace of 1.58 million units in October, and were 1.3 percent higher than a year ago. The median price in the Midwest was $170,000, which was 10.4 percent higher than October 2004.
Total existing-home sales in the Northeast declined 7.4 percent to a pace of 1.12 million units in October, and were unchanged compared to a year ago. The median existing-home price in the Northeast was $252,000, up 10.5 percent from a year ago.
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