Increased demand from investors and first-time homebuyers helped boost existing-home sales in January — the third increase in the past four months, the National Association of Realtors reported.
NAR said total existing-home sales — including single-family homes, townhomes, condominiums and co-ops — were up 4.3 percent from December to January, to a seasonally adjusted annual rate of 4.57 million.
While that’s essentially unchanged from the same time a year ago, for-sale inventory was down 20.6 percent from a year ago, to 2.31 million homes, a 6.1-month supply of homes at the current pace of sales.
Many housing analysts view a six-month inventory of homes as a good balance between supply and demand — a larger inventory of homes can indicate an oversupply of homes for sale, which can undermine prices. When inventories drop below six months, the shortage of homes for sale can drive up prices.
"The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers," NAR Chief Economist Lawrence Yun said in a statement.
Yun cited the statistics as evidence that a government proposal to convert bank-owned properties into rentals on a large scale "does not appear to be needed at this time."
"Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets," he said.
Merrill Lynch analysts Michelle Meyer and Ethan Harris think part of the drop in inventory is due to delays in the foreclosure process in the aftermath of the so-called "robo-signing" scandal.
With top banks nearing a final settlement with state attorneys general, they expect the foreclosure process to accelerate, and for inventory to swell to eight months later this year.
The first REO-to-rental transactions are weeks away, but the property pools offered this year may be smaller and more manageable for groups of qualified local investors than previously assumed, Ken Harney reports.
NAR said foreclosures and short sales accounted for 35 percent of sales in January, and that the national median existing-home price for all housing types was down 2 percent from a year ago, to $154,700.
Investors purchased 23 percent of homes in January, up from 21 percent in December, while the percentage of first-time homebuyers increased from 31 percent in December to 33 percent in January.
Nearly one in every three January home sales was an all-cash transaction. A survey of NAR members showed more than half had at least one contract canceled or delayed in January, often as a result of a mortgage application being turned down or because appraisals come in below the negotiated price.
Single-family home sales were up 3.8 percent from December to January, to a seasonally adjusted annual rate of 4.05 million. That’s a 2.3 percent increase from a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from the same time a year ago.
Existing condominium and co-op sales increased 8.3 percent from December to January, to a seasonally adjusted annual rate of 520,000. That’s a 10.3 percent decline from a year ago. The median existing condo price was $156,600 in January, up 2 percent from January 2011.
At the regional level, the West saw the biggest jump in sales, an 8.8 percent increase from December to January. Sales were down 3.1 percent from a year ago, however, and the median price was also down 1.8 percent from January 2011, to $187,100.
The Midwest saw the smallest jump in sales, with sales up 1 percent from December to January. Although that was a 3.2 percent increase from a year ago, the median home price fell 3.9 percent from January 2011, to $122,000.
In the South, existing-home sales rose 3.5 percent from December to January but were unchanged from a year ago. The median price in the South was $134,800, down 0.3 percent from a year ago.
Existing home sales were up 3.4 percent from December to January in the Northeast, and up 7.1 percent from a year ago. At $225,700, the median price in the Northeast dropped 4.2 percent from January 2011.