Home Sales Continue to Rise, Prices Remain under Pressure


February 23, 2011

For the first time in six months, home sales in the 54 U.S. markets surveyed in the RE/MAX National Housing Report are greater than one year ago. The year-to-year sales difference has been improving for three consecutive months. In January 2011 it turned positive with a 0.7% increase in sales from January 2010. The trend has been led by several cities experiencing double digit sales growth. Home prices, which have been relatively stable, were 4.6% lower than in January 2010. The inventory of homes for sale continued a downward trend, and is now 5.6% lower than January last year.

“We’re very pleased that sales this January are higher than last January, and we’re hopeful that this indicates even higher sales this spring,” said RE/MAX CEO Margaret Kelly.” Although inventories have been steadily shrinking for months, an increase in foreclosure activity could reverse this trend and produce additional pressure on prices.”

Transactions – Year-Over-Year Change
Closed Transactions fell 28.5% from December, which is not annualized and nearly equivalent to the historical December to January change. The year-to-year change in transactions has been improving for three months: -30%, -25% and -5%, and in January finally turned positive with a 0.7% increase over January 2010. Twenty-seven markets, including some that were hardest hit by the housing crisis, experienced exceptional year-to-year growth in home sales: Miami, FL +29.5, Tampa, FL +21.8%, Richmond, VA +20.5, New Orleans, LA +16.9%, and Phoenix, AZ +16.5%.

Median Sales Price – Year-Over-Year Change
Month-to-month home prices in the report’s 54 metro areas have remained even for three months with only fractional changes. However, in January prices dropped 6.6% from December and 4.6% from January 2010, which represents the largest year-to-year drop since May 2010. Still, 17 metro areas experienced a year-to-year increase in sales prices. Some key markets with rising prices include: Jackson, MS +20.9%, Indianapolis, IN +9.4, Pittsburgh, PA +9.1%, Tulsa, OK +5.9% and Washington, DC +3.3%.

Days on Market – Average of 54 Metro Areas
In January, the 54 metro areas averaged 99 Days on Market, up three days from December and eight days longer than January 2010. The RE/MAX National Housing Report shows that Days on Market has remained over 90 for four months in a row. Days on Market is the average number of days from listing to signed contract.

Months Supply of Inventory – Average of 54 Metro Areas
According to the RE/MAX National Housing Report, overall inventory was down 3.6% from last month and down 5.6% from January 2010. The Months Supply of Inventory in January was 10.1, which has remained above nine for six months and above 10 for the last three months. The Months Supply indicates how many months would be required to clear all the homes on the market at the current rate of sales. A balanced market of buyers and sellers is said to be a six-month supply.