Existing-home sales rose year over year for the fourth straight month in October, while the national median price continued to decline, according to the latest monthly report from the National Association of Realtors.
Sales of single-family homes, townhomes, condominiums and co-ops increased 13.5 percent last month to a seasonally adjusted annual rate of 4.97 million. Existing-home sales have been rising by double digits on an annual basis since July. Sales also rose on a monthly basis in October, by a slight 1.4 percent, compared with a 3 percent decrease in September.
At a glance: Existing-home sales (October 2011):
|Seasonally adjusted annual rate||4.97 million|
|% change from Oct. 2010||+13.5%|
|% change from September 2011||+1.4%|
|National median price||$162,500|
|% change from Oct. 2010||-4.7%|
|Unsold inventory (months’ supply)||8|
|Share of all-cash buyers||29%|
|Share of investor buyers||18%|
|Share of first-time buyers||34%|
|Share of distressed sales||28%|
Source: National Association of Realtors.
Nationwide, existing homes sold for a median price of $162,500 last month, down 4.7 percent from October 2010, and a sharper decline than in September, when the median fell 3.5 percent year over year. Distressed homes, typically sold at discount, accounted for 28 percent of sales last month (17 percent were foreclosures, 11 percent were short sales), down from 34 percent a year ago, the report said.
Unsold inventory fell 2.2 percent in October to 3.33 million — an eight-month supply at the current sales pace.
All-cash buyers, most of whom are investors, accounted for 29 percent of purchases last month, unchanged from October 2010, according to a separate NAR survey. Investors accounted for 18 percent of sales last month, up from 19 percent a year ago. The share of first-time buyers in the market rose somewhat, making up 34 percent of sales, compared with 32 percent in September and October 2010.
"Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process," said Lawrence Yun, NAR’s chief economist, in a statement.
"A higher rate of contract failures has held back a sales recovery. Contract failures reported by NAR members jumped to 33 percent in October from 18 percent in September, and were only 8 percent a year ago, so we should be seeing stronger sales."
According to the report, "contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses."
Regionally, the Northeast was the only region to see existing-home sales fall on a monthly basis, 5.1 percent. The region also saw the smallest year-over-year increase in sales last month, 1.4 percent to an annual level of 750,000. The Northeast also experienced the sharpest year-over-year drop in median sales price, 5.5 percent, to $224,400.
As in September, the Midwest saw sales rise the most on a yearly basis last month: up 19.6 percent, to 1.1 million. Sales rose 2.8 percent in October compared to the previous month. The region saw the second-biggest median price slip compared to a year ago: 4.7 percent, to $132,800.
The South also saw a double-digit annual increase in sales last month: up 14.1 percent to 1.94 million. Sales rose 2.1 percent from the previous month. The region’s median price fell 1.6 percent year over year to $145,700.
Median price also fell 1.6 percent on an annual basis in the West, to $207,500. Existing-home sales in the region rose 15.5 percent year over year and 4.4 percent month to month in October, to 1.19 million.
In a separate report released today, the California Association of Realtors reported pending home sales in the Golden State were up 10.7 percent in October from a year ago — the sixth straight month of year-over-year increases, according to the association.
CAR’s pending home sales index also rose 3.1 percent month to month. The index is based on transactions in which a contract has been signed, but not yet closed.
Distressed properties accounted for 46.1 percent of overall sales in the state last month, up from 44.8 percent in October 2010. About a quarter of sales were bank-owned homes (REOs) and about a fifth were short sales.
Nationwide, sales of homes in price ranges under $500,000 rose on an annual basis in October, with homes under $100,000 seeing the biggest jump, according to the NAR report. Sales of homes in price ranges above $500,000 declined, with homes between $500,000 and $750,000 seeing the biggest decrease.
Homes $250,000 and under accounted for 71 percent of all existing-home sales in October.
Among 19 metro areas tracked by NAR, all but two saw sales rise year over year in October. Miami-Ft. Lauderdale, Fla., saw the biggest jump (34.6 percent), followed by Minneapolis-St.Paul, Minn. (33.4 percent) and Atlanta (33.4 percent).
Median prices fell year over year in all but two metros. Atlanta saw the biggest decline (20.1 percent to $87,800), followed by Miami-Ft. Lauderdale (14.7 percent to $179,400). Only San Antonio saw its median price rise more than 1 percent.
|October Metro Area Existing Single-Family Home Sales and Prices|
|*All data is unadjusted for seasonality|
|Median Price||% Change from 1 Year Ago|
|New York-Northern New Jersey-Long Island||$390,900||$363,200||-7.1%||-0.8%|
Source: National Association of Realtors.
In releasing its 2012 housing forecast on Nov. 11, NAR said it has overestimated the number of homes sold in recent years, and revised statistics based on a new benchmarking methodology are forthcoming. The revisions will show fewer homes were sold than NAR previously estimated, but that there will be little change in previously reported ups and downs in home sales on a percentage basis. There will also be no change to median prices or months’ supply of inventory, NAR said. The October sales report is based on the trade group’s current methodology.